Hsieh He Iron Works et al. violated the Fair Trade Law for involving an illegal bidding on a chlorination equipment project at Feng Shan Plant of Taiwan Province Tap Water Co.

Hsieh He Iron Works et al. violated the Fair Trade Law for involving an illegal bidding on a chlorination equipment project at Feng Shan Plant of Taiwan Province Tap Water Co.

Chinese Taipei

Case:

Hsieh He Iron Works et al. violated the Fair Trade Law for involving an illegal bidding on a chlorination equipment project at Feng Shan Plant of Taiwan Province Tap Water Co.

Key Words:

borrow another company's license, accompany with the bid, misleading agency calling for bids, deception

Reference:

Fair Trade Commission Decision of September 29, 1999 (the 412th Commissioners' Meeting), Disposition (88) Kung Ch'u Tzu No. 126

Industry:

other construction industries (4900)

Relevant Laws:

Articles 24 of the Fair Trade Law

Summary:

This case was referred by the Investigation Bureau's Southern Forces Branch to the Fair Trade Commission (FTC), in which Mr. Ch'en Ting-tsai, the responsible person of Hsieh He Iron Works (hereinafter as "Hsien He), had borrowed the licenses of You T'ing Co. and Chi Yang Co. to be invited Hsieh He on the bid of a chlorination equipment project at Taiwan Province Tap Water Co.'s Feng Shan Plant in the 7th Control Zone. Hsieh He was the primary bidder. Additionally, Lin Jui-chen and Ch'en Mei-yu, both relatives of Ch'en Ting-tsai, had issued checks to You T'ing and Chi Yang as bid bonds.
According to the FTC's investigation, the whole scheme was organized by Hung Chen-tsung, Hsieh He's foreman. Mr. Hung first borrowed You T'ing's license to accompany with Hsieh He on this bid, and the accountant of Hsieh He, Ch'en Mei-yu, purchased a check of NT$400,000 from Taiwan Bank to provide You T'ing as a bid bond. Also, Hung Chen-tsung asked Ling Jui-chen as a favor to join the bidding as an accompanied bidder. Because Mr. Lin did not have a five-year experience in cleaning chlorination equipment, he invited Chi Yang Co. to accompany with Hesih He on this bid. Chi Yang's NT$400,000 bid bond was received from Mr. Lin, which was given to Mr. Lin by Ch'en Hu Chin-hua, the wife of Ch'en Ch'ao-he, partner of Hsieh He's responsible person.
The FTC decided that Hsieh He, You T'ing and Chi Yang had participated in the aforementioned bidding and win the bid by a deceptive means in unlawfully borrowing or lending bidding documents. This acts had resulted in the false impression that several enterprises were participating in the bidding, and had thereby concealed the important fact that less than three enterprises were invited in the bidding. This could mislead the agency calling for the bids into believing that the bid winners were awarded the rights to undertake the projects through fair and competitive processes. And as a result, the agency forewent the opportunity to conduct the bidding process again to obtain a lower price for the contracted work; competitors were excluded from a fair and competitive business opportunities as well. Commercial competition ethics were thus harmed and the operation of the market price mechanism was obstructed. These conducts were deemed to be obviously unfair, which were capable of affecting trading order under Article 24 of the Fair Trade Law. As the amendments of the Fair Trade Law went into force on February 5, 1999, and since this unlawful act took place before the amendment had taken effect, so the disposition was made pursuant to the pre-amended fore part of Article 41 of the Fair Trade Law.

Summarized by Huang Chung-chieh;
Supervised by Tso T'ien-liang

Appendix:
He Hsieh Iron Works' Uniform Invoice Number: 75274109
You T'ing Co., Ltd.'s Uniform Invoice Number: 75953129
Chi Yang Co., Ltd.'s Uniform Invoice Number: 86134149

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