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Large builders pay huge fines for collusion

All Headlines 09:49 August 29, 2016

SEOUL, Aug. 29 (Yonhap) -- South Korea's top 10 builders have paid more than 1 trillion won (US$890 million) in fines for unfair practices over the past three years, government data showed Monday, casting doubt on the effectiveness of government penalties.

A combined fine of 1.12 trillion won has been imposed on the leading construction companies for a total of 102 collusion and other "collusive unfair acts" between 2014 and 2016, according to the data that the Fair Trade Commission (FTC) submitted to the office of Rep. Park Yong-jin of the main opposition Minjoo Party.

More than half the combined fine, or 633 billion won, was levied in 2014, when the top seven construction companies and 21 others were fined a combined 347.9 billion won for collusion on part of the project to build a high-speed railroad linking Seoul with the southwestern port city of Mokpo.

The top 10 builders' combined fine dropped to 183 billion won in 2015, but the amount stood at 306 billion won in the first eight months of this year.

Top builder Samsung C&T Corp., the construction arm of South Korea's top conglomerate Samsung Group, paid the largest fine of 239.5 billion won after committing 11 cases of collusive bidding and other unfair practices.

No. 2 player Hyundai Engineering & Construction Co. followed with 230.8 billion won for 15 unfair acts and No. 5 Daelim Industrial Co. with 158.1 billion won.

Rep. Park called on the antitrust watchdog to get tougher on large builders' law violations, saying they continue to repeat law-breaking activities despite penalties.

"The surge in collusive acts by large builders is the result of the FTC's incompetence and their moral hazard," the lawmaker said. "The FTC should impose tougher penalties and fines in order to promote economic democratization and bring the market back to normal."
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