SEOUL, KOREA - As the Prosecutor's Office is set to investigate some of the large construction contractors for suspicions of irregularity involved in the Four Major Rivers Restoration Project, the share prices of construction companies have declined by a large margin on May 16. For months, construction shares had been on a downward trend due to GS Engineering & Construction's earnings shock and the worries over worsening profitability in the overseas construction business. Lately, construction shares have gained renewed attention after the May 9 rate cut to 2.5 percent.
According to the Korea Exchange on the 16th, the construction industry index on the day was 141.29, down 0.93 percent from the previous day. The index bottomed out on April 29 at 126.92 and has since recovered 12.36 percent until the 15th.
The construction companies under investigation by the Prosecutor's Office are 16, including eight (Hyundai E&C, Samsung C&T, Daewoo E&C, GS E&C, POSCO E&C, Daelim Industrial, SK E&C, and Hyundai Development) that have been fined by the Fair Trade Commission for collusion and another eight (Kumho Industrial, Ssangyong E&C, Hanwha E&C, Kyeryong Construction, Hanjin Heavy Industries, Kolon Global, Keangnam Enterprises, and Samwhan Corp.) that has been given corrective orders.
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