Illegal subcontracting in railway electrical works was the 'work' of a bribe-taking Korea National Railway executive

2024.08.14. The Fair Economy — A senior executive of the Korea National Railway was caught by prosecutors after pressuring the winning bidder of a railway electrical work project to illegally subcontract to a specific company. The cause of this criminal act was bribery. The Korea National Railway is a commissioned quasi-governmental organization established to efficiently implement the construction and management of railway facilities and related projects.

The Daejeon District Prosecutors' Office's 4th Criminal Division (division chief Kim Ga-ram) announced on the 13th that it had indicted and detained A, who used the position of "head of the technology division and standing director" to order an illegal subcontract to a specific company during the process of a catenary line construction project ordered by Korea National Railway, and received bribes from the company's representative in return, on charges of violating the Act on the Aggravated Punishment of Specific Crimes (bribery) and obstruction of business. The prosecutors also indicted and detained company representatives B and C, who gave the bribes, and indicted without detention D, the company's actual operator.

According to prosecutors, A, who was the head of the technology division at Korea National Railway at the time of the incident, used his powerful authority and position overseeing the ordering of electrical works, construction supervision, bid-qualification review, and monitoring of illegal subcontracting to pressure the winning bidder to illegally subcontract to a specific company designated by A.

The Electrical Construction Business Act prohibits subcontracting in principle, considering the special nature and risks of electrical construction work. In particular, railway electrical works can directly affect the lives and safety of many citizens, requiring strict management and supervision, but A ignored this.

In return, A received from the representative of the company that had been illegally subcontracted work worth 30 billion won a Rolex watch and a pure gold tiger figurine worth a combined 70 million won. In addition, A was promised a Mercedes-Benz sedan worth 180 million won.

The prosecution said, "By using his superior position to promote illegal subcontracting, a senior Korea National Railway executive hollowed out fair competitive bidding and enabled unqualified individuals to carry out construction on national infrastructure railway facilities, threatening the lives and safety of the people. We have uncovered the substance of this structural corruption and dealt sternly with those involved," adding, "We have discussed measures to prevent recurrence with the Korea National Railway, and we will continue to respond strictly to crimes that threaten public safety and undermine fair competition order."

Meanwhile, Korea National Railway decided to implement measures such as: verifying the actual construction management and conducting safety inspections at construction sites where corruption was detected; confirming the subcontracting status of various railroad electrical construction projects commissioned by the agency; and establishing practical measures to prevent illegal subcontracting in electrical construction.