Prosecution to punish five oil refineries for prearranged bidding

The Seoul District Prosecutor¡¯s Office said Thursday that it would prosecute about 10 officials of five oil refineries on charges of prearranging a bidding.

According to the prosecution, the five oil refineries, including SK Oil, LG Caltex-Oil, Hyundai Oilbank and S-Oil, colluded with each other in the bidding for the right to supply oil for military airplanes from 1998 until last year.

Most of the individuals involved will be indicted without physical detention for violating anti-trust and fair transaction laws, prosecution officials said.

They are suspected of prearranging bidding prices for the right to supply oil worth about 712.8 billion won to the military.

Prosecutors argued that due to their criminal acts, some 123 billion won in national budget funds was wasted. It also was discovered that last year the five oil refineries frustrated the Defense Ministry¡¯s biddings for oil-supply contracts nine times by colluding with each other and making falsely inflated bids. As a result, the military was forced to use more than 20 percent of its wartime reserves for the first time since its inauguration.

The prosecution also plans to embark on an investigation of suspicions that the refineries colluded to hamper the business of oil importers by renting domestic oil storage tanks.

Lee Myoung-Gun gun43@donga.com