Hanwha, STX Engine responsible for bid-rigging

By Kim Se-jeong

The Supreme Court has ruled on Sunday that it was proper for the anti-trust watchdog to fine Hanwha and STX Engine for their price-fixing in a submarine construction project, upholding a lower court ruling in favor of the Korea Fair Trade Commission (FTC).

The two companies filed the suit after the commission fined them in 2012 for collusion in the bid for the sonar system on the 3,100-ton submarine, Jangbogo III, which will be made with home-grown technology by 2020 with a 2.7 trillion won.

The fine for Hanwha was 417 million won and 427 million won for STX Entine.

According to the court, the two companies and LIG Nex1 agreed not to compete in the four auctions by allocating bids in 2009. LIG NEX1 won two bids, while STX Engine and Hanwha won one each. Samsung Thales joined in on the collusion later and won a separate bid.

The companies claimed they did have talks but it was because they discussed establishing a consortium, adding they did not fix anything after bidding conditions were set.

The high court said the collusion damaged the fairness of the bidding and raised the bidding price.

LIG Nex1, fined 2.47 billion won, lost an appellate court trial and is waiting for the Supreme Court ruling. Samsung Thales, fined with 2.68 billion won, won a high court trial and is also waiting for the top court’s decision.

Jangbogo is the name of a legendary Korean admiral during the United Silla Period in the early ninth century.