The Supreme Court has upheld suspended prison sentences for executives at seven major furniture companies, including Hanssem, indicted for rigging bids worth 2.3 trillion won ($1.7 billion) in built-in furniture contracts for newly constructed apartments. Former Hanssem Chairman Choi Yang-ha, accused of being the mastermind behind the collusion, was definitively acquitted.
According to legal circles on May 31, the Second Division of the Supreme Court (presiding Justice Oh Kyung-mi) recently upheld the lower court's ruling that sentenced 10 executives — excluding former Chairman Choi — from seven furniture companies including Hanssem, Hanssem Nexus, Enex, Nexis, Woomi, Sun&L Interior and Livers to suspended prison terms ranging from 10 months to one year, each with two-year probation periods. Corporate fines of 100 million to 200 million won were also finalized for each indicted company. The lower court's acquittal of former Chairman Choi was upheld.
Eight furniture companies including Hanssem were charged with colluding on 783 kitchen and general furniture construction bids for newly built apartments nationwide, commissioned by 24 construction firms between January 2014 and December 2022. The companies allegedly agreed in advance on designated winners and bid prices. The total value of the rigged bids was estimated at approximately 2.3 trillion won.
The first trial court sentenced the 10 executives — excluding former Chairman Choi — from the eight furniture companies to suspended prison terms ranging from 10 months to one year, each with two-year probation. Under dual penalty provisions that punish both individual offenders and their corporations, fines of 100 million to 200 million won were imposed on each indicted company. "Bid rigging is a serious crime that undermines the fairness of bidding, hinders the development of the market economy and damages the national economy," the court said. "In this case, the collusion continued for such a long period that it was difficult for authorities or investigators to even detect."
Former Chairman Choi was acquitted because prosecutors failed to prove that he knew about and condoned the company's bid-rigging activities.
The appellate court overturned parts of the first trial's ruling, finding error in its treatment of violations of the Framework Act on the Construction Industry as a single comprehensive offense regardless of the contracting party. The appeals court acquitted defendants on some charges but ultimately imposed the same sentences as the first trial. Neps did not appeal, so the appellate proceedings involved only seven companies and 11 executives.
Former Chairman Choi was acquitted at the appellate level as well, following his first-trial acquittal. "There is no evidence or testimony that executives directly reported the matter to former Chairman Choi," the court said. "It is insufficient to establish that he participated in the conspiracy."
The Supreme Court dismissed the appeals, finding no error in the appellate court's judgment. "The lower court did not fail to conduct the necessary deliberation, nor did it violate the principles of logic and experience to exceed the limits of free evaluation of evidence, or misapply the legal principles regarding the establishment of violations under Article 95, Paragraph 1 of the Framework Act on the Construction Industry or the counting of offenses under the Fair Trade Act," the court stated.
