'Corruption' arrests in South Korea

12 July 2012

Prosecutors have arrested 22 people as they investigate alleged widespread corruption surrounding Korea Hydro and Nuclear Power's (KHNP's) procurement processes.

An investigation began in September 2011 after a tip-off from a citizen in Ulsan, who reported that he may have witnessed bribery. This led to the arrest on 24 March this year of one KHNP employee and further investigation has now unveiled what prosecutors called 'a wide range of corruption and irregularity'.

The problem stretched from head office to the power plant, throughout the procurement process in which utility officials liaised with companies through professional brokers.

Prosecutors said that one supplier submitted an inflated price for work related to man-machine interface systems. A purchaser was then bribed KRW80 million ($69,000) to accept this as a standard price. One KHNP employee involved in this had personal business interests in the supplier, while a senior official was bribed to remain silent.

Another example detailed by the prosecutor concerned a supplier using single-clip ties to secure insulation within a nuclear power plant's containment building, whereas a double-clip tie should have been used. Over 3 years and six months, the company paid a plant employee a substantial sum to keep quiet.

Other examples of alleged wrongdoing included a KHNP worker who was paid to remove small nuclear power plant components and pass them on so that a company could copy them. Another gained KRW100 million ($86,000) from insider trading of shares in suppliers. And the suppliers themselves were said to have colluded over electronic bidding processes. For their part, brokers also engaged in bribery when registering companies to bid for contracts.

The investigation has so far identified 22 individuals and nine companies that it accuses of exchanging some KRW2.2 billion ($1.9 million) in bribes. Reports in South Korean media indicate several more people could be indicted as the investigation continues.

Ulsan prosecutors underlined that corruption related to a nuclear power plant was made more serious by the potential implications for safety and for that reason heavier punishments could be expected.

KHNP is the operator of South Korea's 23 nuclear power reactors, which between them produce about one third of the country's electricity.

Researched and written
by World Nuclear News

Filed under: South Korea