A trial over alleged bid-rigging in Korea Electric Power Corp. tenders for gas-insulated switchgear (GIS) worth about 670 billion won moved into full swing, with prosecutors and power equipment makers clashing in court over whether the case involves long-running, structural collusion.
The Seoul Central District Court’s Criminal Division 32, presided over by Judge Ryu Kyung-jin, on Tuesday held the first hearing for eight companies — including Hyosung Heavy Industries, HD Hyundai Electric, LS Electric and Iljin Electric — and current and former executives indicted for violating the Fair Trade Act. The court discussed the trial schedule and evidence review and also held bail hearings for some defendants who were indicted in custody.
Prosecutors allege the defendants coordinated intended winners and bid prices in advance in 145 KEPCO GIS tenders from 2015 to 2022, rigging contracts totaling about 677.6 billion won. Prosecutors estimated illicit gains at at least 160 billion won.
GIS is a key device used at power plants and substations to cut excessive current and protect power facilities. Prosecutors said major suppliers, which they say control about 90% of the market, divided up orders over an extended period.
The companies denied collusion and argued the indictment fails to specify the alleged agreement in sufficient detail.
A lawyer for Hyosung Heavy Industries said prosecutors claim there was an overarching agreement but have not identified when or how it was reached. In bid-rigging cases, the lawyer said, prosecutors must specify who communicated in each tender and how winners were decided.
The lawyer also said the indictment includes tenders in which Hyosung did not participate, arguing it is unreasonable to treat nonparticipation due to production issues or sanctions as evidence of collusion.
Other companies likewise said they submitted bids normally based on their own standards and judgment and did not decide winners or prices in advance.
Prosecutors countered that the case was brought to cover an overall collusive structure under the Fair Trade Act and involves dominant firms restricting competition for years. They also said they had identified circumstances suggesting some statements were reversed after collusion was acknowledged and argued the risk of evidence destruction remains.
At the bail hearings, defense lawyers for detained defendants said a lengthy trial is expected, the defendants have fixed residences, and most objective evidence has already been secured, urging the court to allow trial without detention.
Prosecutors opposed bail, citing the scale and seriousness of the alleged conduct and arguing there remains a risk of evidence destruction, including through coordinated responses via the same counsel.
Some defendants also challenged the legality of the investigation. Iljin Electric said materials protected by attorney-client privilege were included in prosecutors’ search and seizure and said it would contest their admissibility.
The Korea Fair Trade Commission last year ordered corrective measures and imposed total fines of 39.1 billion won on 10 companies, including Hyosung Heavy Industries, HD Hyundai Electric, LS Electric and Iljin Electric. Six of the companies were referred to prosecutors.
An administrative lawsuit over the KFTC measures is also underway at the Seoul High Court. How the criminal court defines the scope of collusion and each defendant’s involvement is expected to affect related civil and administrative cases.
* This article has been translated by AI.
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