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🇰🇷 South Korea /Economy & Trade

South Korea Probes 15 Firms for Government Bond Collusion, Fines Could Reach $11 Billion

From Hankyoreh · () Korean

Translated from Korean, summarized and contextualized by DistantNews.

At a glance

News Sources not specified New plan
  • South Korea's Fair Trade Commission has begun investigating 15 banks and securities firms for alleged collusion in bidding for government bonds.
  • The probe focuses on alleged bid-rigging and information exchange among primary dealers between January 2020 and June 2023, affecting approximately 76.2 trillion won ($55 billion) in bids.
  • Potential fines could reach up to 15.24 trillion won ($11 billion), significantly exceeding South Korea's largest previous fine of 1.3 trillion won imposed on Qualcomm.

South Korea's Fair Trade Commission (KFTC) has initiated a probe into 15 financial institutions over suspected collusion in government bond auctions. The investigation centers on allegations of bid-rigging and information sharing among primary dealers from January 2020 to June 2023, impacting bids totaling around 76.2 trillion won ($55 billion).

The bidding collusion and information exchange collusion.

— KFTC investigatorDescribing the alleged anti-competitive actions by the primary dealers.

The KFTC's investigation division has recommended sanctions, including corrective orders, substantial fines, and potential criminal charges against the firms and their current or former executives. The potential fines, calculated as up to 20% of the affected transaction volume, could reach approximately 15.24 trillion won ($11 billion). This figure dwarfs the previous record fine of 1.3 trillion won imposed on Qualcomm in 2017.

The size of the bids affected by the collusion was approximately 76.2 trillion won.

— KFTC officialExplaining the scale of the market impact from the alleged collusion.

The 15 firms under scrutiny include major players like KB Securities, NH Investment & Securities, Samsung Securities, Shinhan Investment Corp., and Korea Investment & Securities, alongside commercial banks such as Kookmin Bank, NongHyup Bank, and Industrial Bank of Korea. The KFTC stated that the delay in the review process, compared to typical timelines, was due to the case's complexity and the need for thorough examination.

This is a very serious illegal act.

— KFTC investigatorCharacterizing the alleged collusion.

The final decision on sanctions and their severity will be made by the full commission in an upcoming plenary session. The investigation highlights the KFTC's commitment to maintaining fair competition in the financial markets and deterring anti-competitive practices.

The potential fine could be up to about 15.24 trillion won.

— KFTC officialStating the maximum possible fine based on the affected transaction volume.
DistantNews Editorial

Originally published by Hankyoreh in Korean. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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