AmorePacific-Kangwon Land ties causes stir

Kangwon Land CEO Moon Tae-kon speaks during the government audit held at the National Assembly on Yeouido, Oct. 20. / Korea Times photo by Oh Dae-keun

By Kim Jae-heun

AmorePacific Chairman Suh Kyung-bae's family members including his father-in-law, Nongshim Chairman Shin Chun-ho, are under suspicion of having monopolized the procurement placement of more than half of the casino machines at Kangwon Land since 2013.

According to the Rep. Ku Ja-keun of the main opposition People Power Party (PPP), Wednesday, three companies _ Taeshin Inpack, Nongshim Data System (NDS) and KGS _ received preferential treatment from the state-owned casino operator. Taeshin is a subsidiary of AmorePacific Group.

Both Taeshin and KGS are run by AmorePacific chairman's cousins. Suh Myoung-hyun runs Taeshin and Suh Jun-mo operates KGS, while NDS is an affiliate of Nongshim Group owned by Shin.

The three regularly bid for supplying gambling machine equipment but they often submitted their proposals after the deadline and some of the proposals even contained false information.

NDS, in particular, placed a tender for 2.95 billion won worth of electronic table orders 80 minutes after the deadline on July 22 but Kangwon Land selected the Nongshim unit as the winner.

This is a violation of laws related to electronic bidding, which bans changes to the designated date and time of the bidding.

Kangwon Land acknowledged that it broke the law but strongly denied that it showed favoritism to a particular bidder. It further added that there was no instruction or pressure from above.

Rep. Ku also disclosed that NDS' casino equipment did not adopt a “roll-back” feature, which the casino operator said was essential for winning the bid. A roll-back system is a function that retrieves or recalculates game money to correct any errors taking place after the game.

Between last year and this year, NDS also came late into the bidding, but it formed a consortium with Taeshin and KGS to win three of four bids.

The lawmaker has called for a full investigation to ensure the state-run casino company is run more transparently.

Kangwon Land has been selecting bidders for its casino machines, electronic tables and other products publicly. However, questions have constantly been raised about the fairness of the bidding process.

KGS, Taeshin, KTY and NDS have won over half of the supply contracts in the last seven years. Suh Joon-mo is the largest shareholder of KGS with 44 percent. He is a family member of Suh Myoung-hyun, also the largest shareholder of Taeshin Inpack. An executive at Taeshin surnamed Lee also owns 8 percent of KGS' stock.