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Hyundai E&C Under Investigation by Indonesian Authorities on Charges of Bribery
Suspected of Bribing a Local Politician
Hyundai E&C Under Investigation by Indonesian Authorities on Charges of Bribery
  • By Jung Min-hee
  • October 14, 2019, 12:00
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Hyundai Engineering & Construction is being investigated by Indonesian authorities for bribing an Indonesian politician in connection with construction of a coal-fired power plant in the country.

Hyundai Engineering & Construction is being investigated by Indonesian authorities on charges of bribing an Indonesian politician in connection with a coal-fired power plant project in the country.

Indonesian investigators have banned Hyundai E&C officials involved in the case from leaving the country and requested cooperation from South Korean prosecutors.

During a parliamentary inspection on Oct. 7, Rep. Kim Sung-hwan of the ruling Democratic Party, a member on the National Assembly’s Trade, Industry, Energy, SMEs and Startup Committee, said, “Hyundai Engineering & Construction is suspected of having given 550 million won (US$464,100) of money to the Indonesian official through a broker to calm protests from residents in the area over the construction of the coal fired power plant Cirebon Unit 2.” Kim also asked the government to launch an investigation into overseas coal-fired power plant projects carried out by Korean construction companies and called for an across-the-board ban on Korean companies from participating in overseas coal-fired plant projects.

“Construction was delayed due to protesting residents so we dealt with the problem through a legal advisory firm. Local investigation authorities announced we have bribed a local official,” said an official from Hyundai E&C during a parliamentary inspection.

The Export-Import Bank of Korea (Exim Bank) extended 620 billion won (US$523.38 million) for the Cirebon coal-fired power plant project, while Korea Midland Power Co. made an equity investment worth 50 billion won (US$42.21 million) in the project. Construction work has been carried out despite demonstrations by local residents and environment groups, who are concerned about air pollution.

Currently, Indonesian investigators are looking into the alleged involvement of Hyundai E&C officials in bribing the local politician in return for preventing demonstrations. The politician, who was sentenced to five years in jail for taking bribes, reportedly said he had received 550 million won (US$464,100) from Hyundai E&C on six occasions and mobilized troops to protect the power plant construction project from protesting residents.”