Former CJ CheilJedang and Samyang Corporation executives in sugar collusion case receive suspended sentences in first trial... "The culpability is serious"

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[Financial News] Former and current executives of CJ CheilJedang and Samyang Corporation, who were brought to trial on charges of earning trillions of won in profits through sugar price collusion, received suspended prison sentences in the first trial.
On the 23rd, Judge Ryu Ji-mi of the Criminal Division 5, sitting alone at the Seoul Central District Court, sentenced Kim, a former head of CJ CheilJedang's food division in Korea, and Choi, a former CEO of Samyang Corporation, both charged with violating the MRFTA, to two years and six months in prison, suspended for three years, and a fine of 100 million won each.
The remaining executives also received suspended prison terms or fines. Under the joint penalty rule, CJ CheilJedang and Samyang Corporation, which were indicted together, were each fined 200 million won. Kim and Choi, who had been on trial while in custody, will now undergo immediate release procedures.
The court said their actions undermined the purpose of the MRFTA. It stated, "This offense undermined the basic purpose of the MRFTA and is highly blameworthy." It added, "CJ and Samyang had already been investigated by the KFTC for collusion in flour and sugar, and although they were exempted from criminal referral and fines through the leniency program for voluntary reporting, their executives committed this offense again."
The court also said, "Even if this was collusion, the burden on consumers could be passed on, so the culpability is not light."
However, the court explained, "Considering the fact that international raw sugar prices are publicly disclosed, the bargaining power of large industrial buyers, and exchange rates, it does not appear that they were able to reap excessive profits." It added, "They have admitted all charges and shown remorse, and they are working to prevent a recurrence by strengthening compliance education for CJ and Samyang employees and building internal control systems."
They were indicted for colluding on sugar prices from February 2021 to April last year.
Investigators found that over the past four years, the companies jointly and unfairly restricted competition with other businesses by quickly passing on increases in raw sugar prices to sugar prices, while underreflecting price cuts when raw sugar prices fell. The scale of the collusion was estimated at 3.2715 trillion won.
During the period of the offense, sugar prices rose by as much as 66.7% at their peak in October 2023. Even after factors that should have lowered raw sugar prices emerged, the companies only made modest cuts, leaving prices still 55.6% higher than before the collusion began.
On the 9th, prosecutors asked the court to sentence Kim, the former head of CJ CheilJedang's food division in Korea, to three years in prison and a fine of 100 million won, and Choi, the former CEO of Samyang Corporation, to two years and six months in prison and a fine of 70 million won.
With the first court ruling on sugar price collusion now issued, it is expected to serve as a benchmark for future trials related to the Lee Jae-myung administration's collusion investigations.
theknight@fnnews.com Jung Kyung-soo Reporter