South Korea’s largest shipbuilder Hyundai Heavy Industries Co. is banned from participating in state-led tenders such as warship construction projects for two years due to the bribery conviction related to the country’s nuclear power project in the United Arab Emirates.
According to Hyundai Heavy Industries on Friday, Korea’s Supreme Court on Dec. 22 made a final decision rejecting a lawsuit raised by the shipbuilder against Korea Electric Power Corp. (KEPCO) to nullify restriction on its participation in state-led tenders.
The latest ruling by the court came after Hyundai Heavy Industries lost in the 2015 trial where it sought to nullify restriction imposed on the company in 2013 banning it from entering public tenders after its executives were found guilty of offering about 1.7 billion won ($1.6 million) in bribes to a former Korea Hydro & Nuclear Power Co. (KHNP) official in return for winning deals to supply parts for the reactors to be exported to the UAE. Korea in 2009 won a landmark deal to build four reactors in the Middle Eastern country. The court sentenced the former KHNP official to 12 years in prison and three years for the former Hyundai Heavy Industries executive. The court in August rejected an appeal raised by the company before the latest ruling.
Since the latest announcement late last year, Hyundai Heavy Industries has been listed as an “improper” business entity and immediately banned from participating in tenders for state-led public projects for two years until the end of 2019.
Hyundai Heavy Industries’ special ship manufacturing division that makes warships and submarines will not be able to take part in any bids from Defense Acquisition Program Administration for the next two years. The company said the latest decision would have limited impact on the company’s overall business because sales of its special ship division are estimated to account for about 3 percent of the company’s total sales.
By Woo Je-yoon and Lee Eun-joo
[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]