105 System Furniture Bids for New Apartments
Participation After Agreeing on Successful Bidder or Bidding Price
The prosecution has brought furniture companies to trial on charges of giving and receiving money in exchange for "cover bidding" after winning a new apartment system furniture construction project worth approximately 120 billion KRW through bid rigging.
The Fair Trade Investigation Division of the Seoul Central District Prosecutors' Office (headed by Kim Yongshik) announced on the 27th that on the 4th, it had indicted three corporations?Dongsungsa, Spacemax, and Jamart?as well as the chief executives of each company, without detention. They are charged with violating the Framework Act on the Construction Industry and the Fair Trade Act in connection with bid rigging.
Additionally, on the 25th, three companies?Dongsungsa, Spacemax, and JC?and the top decision-makers of each company were indicted without detention on additional charges of violating the Framework Act on the Construction Industry in relation to cover bidding.
The prosecution believes that Dongsungsa, Spacemax, and Jamart participated in 105 system furniture bids ordered by 10 domestic construction companies between February 2012 and November 2022, after agreeing in advance on the successful bidder or bidding price. The total amount awarded through these bids is reported to have reached 120.3 billion KRW.
After receiving a complaint from the Fair Trade Commission regarding violations of the Fair Trade Act by these corporations, the prosecution launched an investigation. Through search and seizure operations and questioning of those involved, the prosecution indicted Dongsungsa CEO A, Spacemax Chairman B, and Jamart CEO C, stating that they gave final approval to the collusion.
Furthermore, through an additional investigation, the prosecution found that Dongsungsa, Spacemax, and JC exchanged a total of 1,055,610,000 KRW under the pretense of participating in cover bidding for two system furniture bids between April 2016 and September 2020. According to the prosecution, these companies disguised the payments as if they were for goods transactions in order to evade regulatory scrutiny.
In addition, it was found that a portion of the expected construction profits was paid to companies participating as cover bidders, and that bribes were offered to the intended winning bidder in exchange for changing the order of the successful bidders.
The prosecution stated that it has consolidated the indictments against Dongsungsa, Spacemax, JC, and three executives and employees from each company on charges of violating the Framework Act on the Construction Industry for these offenses.
However, in the case of Hanssem, the prosecution plans to consider the progress of related trials before taking action, as the company is subject to the leniency program (leniency) under which sanctions such as fines and corrective measures are reduced if a participant in the collusion is the first to voluntarily report.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
