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The Supreme Court upheld penalties against Citibank Korea, JPMorgan, and two others imposed by the Fair Trade Commission (FTC) over alleged collusion in currency exchange swap transaction bids with state firms.
According to The Korea Times, the Supreme Court announced its ruling recently, and it apparently upheld the FTC's move to impose penalties on Citibank Korea, JPMorgan, and two other groups. The Korean regulators accused the said financial firms of conspiring to rig the bidding process for currency exchange swap transactions with state-run firms in South Korea like the Korea Hydro & Nuclear Power (KHNP) and the Korea Highway Corp.
In any case, in 2020, the KFTC fined Citibank Korea, Credit Agricole, and HSBC Bank a combined total of KRW1.32 billion or $1 million. The penalty was for their supposed participation in manipulating the bid process.
The breakdown of the amount shows Citibank Korea getting the highest fine, amounting to KRW900 million, and HSBC came in second with KRW387 million. Lastly, Credit Agricole was only asked to pay KRW34 million in penalty.
They were also ordered to put right their business malpractices at that time. On the other hand, JPMorgan was not commanded to pay a fine but received the same correction order from the antitrust watchdog.
In response, the Korean unit of Citibank and JPMorgan protested FTC's decision. To counter the injunction, they proceeded to file an administrative legal contest with the Seoul High Court. They received a favorable result in 2021 when the FTC's resolution was reversed by the court
With the result, the agency brought the case to the Supreme Court, and the final verdict was handed down on Aug. 31, as per Business Korea. The court battle ended in favor of the FTC.
The local Fair Trade agency now expects the latest ruling to help with the formation of a just and upright competition environment among lenders. It also took the opportunity to dissuade JPMorgan, Citibank Korea, HSBC, Credit Agricole, and other lenders from committing any price-sharing violations.
"The ruling will promote price competition when lenders bid for currency swap transactions in the future," an official of FTC stated. "Lenders are also expected to tighten their internal control systems, particularly on their sales personnel's possible illegal activities."
Photo by: Precious Madubuike/Unsplash
