15 Firms Face Record Fine Over Government Bond Bid-Rigging Allegations in South Korea

South Korea's Fair Trade Commission is poised to rule on allegations of bid-rigging involving 15 primary dealers of government bonds. The firms, including major securities companies and banks, are accused of colluding on bid prices, volumes, and information from January 2020 to June 2023. This alleged manipulation could have inflated the government's borrowing costs.

The commission is reportedly preparing to hold a full board meeting by the end of this month to decide on sanctions. These could include significant fines, corrective orders, and even criminal charges against the companies and their executives. The potential fines could reach a record 15 trillion won (approximately $11 billion USD), based on the estimated 76.2 trillion won in bid amounts involved in the alleged collusion.

However, the accused firms are pushing back against the commission's findings. They argue that the information sharing was merely for understanding market trends and that fines should be based on actual profits, not total bid amounts. The companies contend that the commission's calculation of related sales revenue, used for determining fines, is excessive. The Fair Trade Commission has sent investigation reports to the 15 firms, outlining proposed sanctions and potential charges.