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People buy masks at a supermarket in Seoul’s Seocho District on Apr. 1. (Yonhap News)

Because of illegal deals between mask distributors and brokers, masks that were manufactured for just 300 won were supplied to the South Korean market for more than seven times the price. Along the way, distributors and brokers siphoned off tens of millions of won in commission.

A team at the Seoul Central District Prosecutors’ Office in charge of looking into disruptions in the distribution of public health supplies investigated 70 companies implicated in the illegal manufacture and distribution of masks. As a result of this investigation, three people were detained on charges of disrupting public distribution, 27 people were indicted without being detained, and 9 people were given summary indictments, the team announced on Apr. 14.

This past February, the scarcity of masks became a major issue in society after the government raised the alert level for the COVID-19 outbreak to “severe,” the highest level. The Seoul office of the prosecutors responded by setting up the team on Mar. 2 and instructing it to focus its investigation on serious offenses that were distorting the mask distribution system.

Investigators learned that masks were sold for an excessive profit as they made their way through the contorted distribution system. In one case discovered by the prosecutors, a distribution company purchased 200,000 masks from a manufacturer for 66 million won (US$54,373), or 330 won (US$0.27) per mask.

But as the bundles of masks passed through three separate distributors (both individuals and corporations), the price rose first to 240 million won (US$197,720, or US$0.99 per mask), then to 330 million won (US$27,744, or US$1.36 per mask), and finally to 429 million won (US$353,267, or US$1.77 per mask). The price kept rising because brokers involved in each stage of distribution were collecting commissions in the millions and tens of millions of won.

Since the 200,000 masks were sold by the final distributor (which had bought them for 429 million won, or US$353,264) to Hope Bridge at no margin, they ended up being sold to consumers for seven times their factory cost.

The prosecutors also turned up examples of manufacturers who’d broken the law by skipping the necessary testing of the MB filters that are the primary component in the masks. Unwilling to spend the time necessary to conduct suitability testing on the MB filters, one mask manufacturer used 52 tons of untested filters imported between December 2019 and February 2020 to manufacture and distribute 26.14 million masks.

In another incident, a mask buyer was defrauded of a 130 million won (US$107,050) deposit after being given a tour of a fake factory by a swindler who had neither the ability nor intent to deliver the promised masks. The prosecutors said they’d seized about 6 million masks and related materials during the course of their investigation, which were later sold to the public through government-approved retailers.

By Jang Pil-su, staff reporter

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