South Korean oil refiners settle U.S. bid-rigging charges
WASHINGTON, March 20 () - South Korean oil refiners S-Oil Corp and Hyundai Oilbank Co have agreed to settle criminal and civil charges of rigging bids to supply fuel to the U.S. military, the Justice Department said on Wednesday.
The companies have agreed to plead guilty to criminal charges, the department said. Hyundai will pay $83.1 million in criminal and civil fines while S-Oil will pay $43.58 million to settle the allegations, the Justice Department said.
S-Oil said in a statement that it had reached a settlement with the Department of Justice and taken steps to prevent any further problems.
Hyundai Oilbank did not have a comment on the matter, a company spokesman said.
The indictment also names seven defendants, all South Koreans, who allegedly conspired to rig the bids. All seven live in South Korea. In addition to the antitrust charges, one of the seven, Hee-Soo Kim, is accused of witness tampering, the Justice Department said.
The department settled last year with SK Energy Co Ltd ; GS Caltex Corp, which is 50 percent-owned by Chevron ; and Hanjin Transportation Co Ltd. They agreed to pay a total of $236 million in criminal fines and civil damages.
reported in November that the Justice Department believed that S-Oil Corp, South Korea's No. 3 refiner, and Hyundai Oilbank also participated in a bid-rigging scheme that led to more than $100 million in overcharges to the U.S. military.
The South Korea investigation is part of a Justice Department crackdown on companies that defraud the U.S. government on military contracts.
The U.S. military had a budget of about $700 billion in the 2018 fiscal year, which ended on Sept. 30. A big chunk of the budget is spent in South Korea where the United States has kept a military presence on the divided peninsula since the 1950-1953 war. There are currently more than 28,000 troops in South Korea while Camp Humphreys, south of Seoul, is the largest U.S. overseas base with nearly 20,000 U.S. personnel.
The Justice Department said the investigation began as a result of a tip telephoned into the Defense Logistics Agency Inspector General Hotline.
Saudi Aramco is the biggest shareholder in S-Oil, with a 63.41 percent stake. It said in January that it planned to invest up to $1.6 billion for a nearly 20 percent stake in South Korean refiner Hyundai Oilbank.