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Vietnam Today

POSCO investigated further

Released at: 14:11, 10/04/2015

POSCO investigated further

Allegations of impropriety made against the steel giant are being looked into by Vietnamese authorities.

by Minh Tien

The Ministry of Transport on April 9 decided to launch an inspection into five portions of two expressway projects contracted to South Korea's POSCO Engineering & Construction Co. (POSCO E&C) - a construction arm of POSCO – the world's third-largest steel maker.

The inspection team will include six members from the Ministry of Transport, the Department of Science and Technology, and the Department of Transport Construction and Quality Management.

The team will be headed by the Ministry's Deputy Chief Inspector Le Van Doan and will look into the process of selecting contractors and making payments to uncover possible wrongdoings and violations of the law.

The inspection team leader is authorized to advise the Minister of Transport Dinh La Thang on how to deal with the audit's results. "Any wrongdoings or violations will be punished," Minister Thang said. However, the team will also propose the addition of regulations that it finds missing or revisions to current regulations that it finds improper.

POSCO E&C was the main contractor of five packages of the Noi Bai - Lao Cai Expressway linking Hanoi and Lao Cai Province and Ho Chi Minh City - Long Thanh - Dau Giay Expressway linking HCMC and Dong Nai Province.

The packages were worth around VND10 trillion ($463 million). Both projects, invested in by the Vietnam Expressway Corporation, lagged behind schedule and had some quality problems.

Late last month, South Korean media carried a number of headlines about the arrest of a former executive at POSCO, referred to as Park only, who is suspected of embezzling 4 billion won ($3.7 million) from a slush fund while he worked as the overseas unit chief of a project in Vietnam.

The Korea Herald reported that POSCO E&C came under investigation after an internal audit within the company found the existence of the slush fund earlier this year.

Following Park's arrest and the Ministry's press conference, the executive director of POSCO E&C, identified only as Choi, was detained on April 9 for questioning into his suspected involvement in the slush fund and bribes taking from a subcontractor.

The allegations are that Choi played a role in generating about 3 billion won ($2.7 million) for the slush fund via the company's subcontractor Heungwoo Industrial from May 2010 to 2013.

The Korea Herald quoted South Korean prosecutors as saying that Heungwoo Industrial's foreign branches took part in a highway construction project in Vietnam and are suspected to have contributed to the slush fund

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