Korea: Three more South Korean firms rigged US military bids

South Korea’s S-Oil Corp, Hyundai Oilbank, and Jier Shin Korea took part in a bid-rigging scheme that led to more than US$100 million in overcharges to the US military, according to two sources with knowledge of the matter.

The three companies were not named in filings in US federal court in Ohio that described a conspiracy that involved a total of six companies that overcharged US military bases in South Korea for fuel.

The South Korea bid-rigging investigation is part of a more aggressive effort by the US Justice Department (DOJ) to crack down on companies that defraud the US government on military contracts.

The court papers filed by the DOJ after it settled with three other companies last month named SK Energy; GS Caltex—50% owned by Chevron; and Hanjin Transportation. They agreed to pay a total of US$236 million in criminal fines and civil damages.

The DOJ estimated that the bid rigging occurred from about 2005 to 2016. The government procurement data site GovTribe stated that between 2008 and 2013, the major sellers of fuel to US military bases in South Korea were S-Oil, GS Caltex, SK Energy, Hanjin, Hyundai Oilbank, and Jier Shin Korea.

S-Oil Corp stated through a spokesperson that it was “unaware of any investigation.” S-Oil is partially owned by Aramco Overseas, according to both Aramco’s and S-Oil’s websites.

A spokesperson for Hyundai Oilbank acknowledged that it was under investigation, but declined further comment. A Jier Shin Korea spokesperson also was “unaware of such investigation.”

Court filings which accompanied the DOJ settlement with SK Energy, GS Caltex, and Hanjin this month referred to other companies involved in the probe as Company A and Company C, both oil companies, and Company B, a logistics firm.

The sources, who were not authorized to speak on the record, identified S-Oil and Hyundai as the oil companies and Jier Shin as the logistics company.