DSME faces lawsuit for unpaid subcontracting fees
DSME faces lawsuit for unpaid subcontracting fees
  • Lee Jun-sung
  • 승인 2019.08.01 12:07
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Subcontractors damaged by the big power trip by Daewoo Shipbuilding & Marine Engineering (DSME) filed a complaint with the prosecution on July 29 against the company on charges of not paying bills to their subcontracts.

A damage countermeasure committee held a press conference in front of the Seoul Central District Prosecutors' Office in Seocho-gu, Seoul, earlier in the day to call for a stern investigation into DSME's overuse of its power. 

The task force sued former DSME CEO Jung Sung-leep, six executives and officials of  DSME and Korea Development Bank officials who were sent to DSME on charges of violating the specific economic crime law, obstruction of justice and destruction of evidence. 

The task force criticized CEO Jung and others for deceiving sub-contractors and exploiting unfair profits even though they did not have the ability and intention to pay due subcontracting fees due to lack of budget and design capabilities.

"DSME has been paying sub-contractors less than the amount of work done to in-house subcontractors," the committee said. "The 15 companies did not receive 148.4 billion won in sub-contract payment." 

When the Fair Trade Commission (FTC) launched an investigation into DSME after it was sued by a subcontractor in 2017, it deleted payment data and other materials for the three years before 2017 to prevent the FTC from carrying out its legitimate official duties, they added.

The committee also asked for the transfer of the unfair subcontracting case of DSME, which is being investigated by the Tongyeong branch of the Changwon District Prosecutors' Office last year, to the subcontract division of Seoul Central Prosecutors' Office due to the FTC's criminal complaint.

In December last year, the FTC filed a complaint with the prosecution against DSME, which unilaterally decided and paid the subcontracting fee without issuing a contract letter in advance when it commissioned subcontractors to produce marine plants and ships.

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