[Alpha Biz= Kim Jisun] SEOUL, South Korea – October 23, 2025 – South Korea’s Fair Trade Commission (FTC) has imposed a ₩40 million (approx. $29,000) fine on Dongwon Construction & Industry Co. for violating subcontracting laws by falsifying project contracts and unfairly transferring costs to subcontractors involved in a public infrastructure project.
According to the FTC’s announcement on Wednesday, Dongwon Construction was found to have issued falsified written contracts for subcontracted work on sections of the National Highway No. 5 Chuncheon–Hwacheon road construction project, including earthworks, reinforced concrete, and tunnel construction, during 2019 and 2021.
The company allegedly omitted ₩3.56 billion (approx. $2.6 million) worth of subcontracted work from the official contracts and misrepresented the project to the main client as self-performed construction in order to meet the Public Procurement Service’s bidding qualification requirements.
This deliberate omission created the risk that subcontractors might not be paid for unrecorded work, the commission said.
Dongwon Construction was also found to have imposed additional costs on subcontractors for extra work, complaint resolution, safety incidents, and acts of nature, regardless of fault — terms deemed unfair and abusive under the Subcontracting Act.
Furthermore, the company inserted unilateral termination clauses in its contracts, allowing it to cancel agreements without consultation if it deemed progress unsatisfactory.
“Dongwon Construction’s contract structure gave the main contractor the ability to arbitrarily terminate or shift risks to subcontractors, constituting clear violations of the Fair Transactions in Subcontracting Act,” the FTC said.
The FTC has ordered corrective measures and payment of the fine, emphasizing that transparency and fairness in subcontracting are essential to ensuring a competitive and sustainable public construction sector.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
