South Korea’s antitrust watchdog said Wednesday that it had fined four foreign banks a total of 1.3 billion won ($1.1 million) for fixing the prices of foreign exchange derivatives and manipulating the bidding process when dealing with local firms.

According to the Fair Trade Commission, Citibank’s Korean subsidiary and local units of JP Morgan Chase, HSBC and Credit Agricole have colluded in price bids to win three forex derivatives contracts from four public and private companies here. The deals took place between January and September 2010.

Citibank Korea, HSBC and JP Morgan Chase were all involved in price fixing in two currency swap biddings by the Korea Expressway Corp., the state-run organization in charge of running the national expressway system. They conspired to allow HSBC to win the bid for the dollar-won currency swaps worth a combined $180 million, the FTC said.

Citibank Korea and HSBC were also involved in another dollar-won currency swap bidding by the state-run Korea Hydro and Nuclear Power. HSBC decided not to enter the bidding, allowing the New York-based bank’s Korean subsidiary to win the bid. The currency swaps were worth $100 million.

In a bidding by an unidentified private firm here, HSBC conspired with Credit Agricole to manipulate the price of a euro-won currency swap.

Of the banks, Citibank Korea was slapped with the heaviest fine of 900 million won.

The banks conspired to eliminate competition and raise the prices of foreign exchange derivatives.

In January, the FTC fined Standard Chartered Bank Korea and the local units of Deutsche Bank AG, JP Morgan Chase and HSBC a combined 693 million won in similar price-fixing cases.

By Jung mkjung@heraldcorp.com">Min-kyung (mkjung@heraldcorp.com)