South Korean firms plead guilty to rigging US military fuel tenders

WASHINGTON (Reuters) – Three South Korean companies will plead guilty to criminal charges and pay $236 million (£181.5 million) for their role in a conspiracy to fix the price of fuel sold to U.S. military bases in South Korea, the Justice Department said on Wednesday.

SK Energy Co Ltd (SKENGG.UL); GS Caltex Corp (GSCAL.UL), 50 percent owned by Chevron; and Hanjin Transportation Co Ltd agreed to pay the United States $154 million in civil damages and $82 million in criminal fines, the department said.

The settlement was part of a broader investigation involving other companies, Deputy Attorney General Makan Delrahim, head of the Justice Department’s antitrust division, told reporters.

The three “and other co-conspirators rigged bids and prices for U.S. military fuel contracts in this strategically important region for more than a decade,” Delrahim said.

The department said the conspiracy began around March 2005 and continued into 2016. South Korean oil companies and refiners and their agents sought to limit competition in bidding for U.S. military fuel contracts.

“As a result of the anticompetitive agreement, the U.S. Department of Defense paid significantly more for fuel delivery services than it would have in the absence of the collusion,” Delrahim said.

SK Energy and GS Caltex Corp. could not be reached for comment.

Chevron spokesman Braden Reddall said the company had fully cooperated with authorities in the investigation into Caltex. “No Chevron employees were involved in this matter,” he said.

Hanjin spokesman Seung Bae Lee said the company “is committed to complying with antitrust and competition laws and values ​​its decades-long cooperation with the U.S. military.”

According to the Justice Department, SK Energy will pay $124.5 million in fines and other fees, GS Caltex $104.2 million and Hanjin $7.6 million.

The department said the payments made by the companies “exceed the amount of the individual overpayment”.

(Reporting by Sarah N. Lynch, Diane Bartz, David Alexander; editing by Steve Orlofsky and Grant McCool)