Prosecutors brought eight major domestic furniture companies and 14 individuals, including former and current executives, to trial on charges of repairing special sale furniture (built-in furniture) worth 2.3 trillion won. This case is the first case where the prosecution, which created the ‘Guidelines for Reduced Penalty and Exemption for Cartel Cases’ in December 2020, commenced an investigation into a case that was voluntarily reported without charge to the Fair Trading Commission.
On the 20th, the Fair Trade Investigation Division of the Seoul Central District Prosecutor’s Office (Chief Prosecutor Lee Jeong-seop) identified eight furniture companies, including Hanssem, Hanssem Nexus, Neps, Enex, Nexis, Wooami, Sun&L Interiors, and Reverse, for breach of the Framework Act on the Construction Industry and the Fair Trade Act. Former and current CEOs of eight companies and 11 executives and employees who were responsible for the special furniture sales business were also charged without custody. Two deputy general managers in charge of special furniture sales in Rivers were summarily charged on the same day for attempting to conceal or conceal evidence during the prosecution’s search and seizure process. A senior Hyundai Livart employee was also handed over to trial.
Prosecutors said individuals were also prosecuted to effectively curb collusion, but executives who approved the collusion were mostly prosecuted, and work-level employees who passively participated were minimally prosecuted. In six companies, former CEOs and current officers were prosecuted, and in three cases, the owner, who is the main shareholder, was prosecuted. There are two companies where only the business executives were prosecuted. First of all, the former chairman of Hanssem, Choi Yang-ha, was charged together with Han Hee-seok, former executive director of special sales business, and Song Gi-ryong, former executive director of special sales business of the same company. Former CEO Beom-Soo Kim of Neps, CEO Min-Ho Choi of Nexy, Hae-Kyung Jeong, CEO of Woomi Furniture, Jae-Sin Park, former CEO of Sun&L Interior, and Se-Jin Reverse were charged , CEO of Rivers as well. . Executive director and director Hansem Nexus, and Kim Si-cheol, executive director of special distribution business at Enex, were charged.
Between January 2014 and December 2022, they are accused of colluding for a total of 2.3261 trillion won in 783 new apartment construction sites across the country ordered by 24 construction companies. Employees of a furniture company were investigated for participating in bidding for the construction of kitchen and general furniture after confirming the procedure for winning bids through a preliminary meeting. After sharing the bid price and the estimate, the successful bidder and the prospective bidder agree on the bid price, etc., to select a bridesmaid company, and the agreed company is motivated to win the lowest price. According to the prosecution, in every car rental agreement that has been colluding for nine years, a company that has been predetermined among the companies won the bid. Nine furniture companies were initially investigated, but not one was prosecuted under the Leniency system, which does not punish companies that voluntarily report collusion.
In May of last year, the FTC and the Prosecutor’s Office received a voluntary report requesting an exemption from punishment for collusion. After waiting for the FTC’s conclusion for eight months, the prosecution launched a pre-emptive investigation in January by applying charges of violating the Framework Act on the Construction Industry. After search and seizure, on the 12th, the Fair Trading Commission was asked to charge 8 corporations and 12 executives and employees with breaching the Fair Trading Act.
In a briefing on the results of the investigation held at the Seoul High Prosecutor’s Office in Seocho-gu, Seoul on the same day, Chief Prosecutor Lee said, “It clearly revealed the crime of installing built-in furniture in apartments, which made it’s difficult. for the common people to dream of owning a home by raising house prices, and sounding the alarm on chronic disease.” Illegal practices were common, and the executives and staff members had no sense of guilt. In particular, we were accountable to the CEO and general executive officer who finally approved the collusion and enjoyed the profits.” “In a special situation where the prosecution’s investigation and the Fair Trade Commission’s investigation are being carried out at the same time, we held several high level and working level meetings and communication to ensure the consistency of the dispositions of the two agencies,” he said. We will work closely together,” he said.
