It has been discovered an inquiry by the National Assembly on Feb. 26 that POSCO E&C executive members at an overseas construction site were internally punished in July last year for having raised a slush fund of over 10 billion won (US$9 million).
Prime Minister Lee Wan-koo told the judicial authorities to investigate the case, when it was issued during an inquiry at the National Assembly on Feb. 26.
According to POSCO E&C, some of its executive members in charge of projects in Vietnam raised the slush fund by exaggerating payments to Vietnamese subcontractors. The fund was paid to ordering bodies each month between 2009 and 2012. POSCO E&C is currently building new towns, road networks, and the like in the country.
“Such rebates paid at the request of ordering bodies are a kind of business practice in many overseas construction projects,” said an industry expert, adding, “However, this case is somewhat unusual in that a huge amount was paid over a long period of time, and the company was not aware of the payments.”