Prosecutors Indict Six Companies, Including LG Chem, and 37 Executives and Employees Over Alleged 16 Trillion-Won Petrochemical Cartel

[Financial News] Prosecutors indicted related companies and current and former executives and employees en masse after determining that major domestic petrochemical companies had engaged in price fixing and bid rigging worth more than 16 trillion won.
The Fair Trade Investigation Division of the Seoul Central District Prosecutors' Office, headed by Chief Prosecutor Na Hee-seok, indicted six companies dominating the domestic petrochemical market, including LG Chem, along with 37 executives and employees, including current and former chief executives, on charges of violating the Monopoly Regulation and Fair Trade Act (MRFTA) on the 1st.
LG Chem's current head of its China Group, identified only as A, and the head of sales at Petrochemical Kala (PKC) were indicted while in custody.
Prosecutors believe that seven domestic petrochemical companies engaged in collusion involving eight key petrochemical product categories used across industries from January 2021 through April this year.
Prosecutors concluded that the companies agreed in advance on transaction prices for each product and colluded on bid prices and other terms when bidding against buyers that purchased products through a bidding process.
The total value of the alleged collusion identified by prosecutors was 16.3961 trillion won. The prosecution said its investigation confirmed the substance of so-called "customary collusion" that continued over an extended period across the petrochemical industry, rather than being limited to individual products.
Prosecutors particularly pointed out that, because the products targeted by the collusion are essential raw materials used in various industries, the resulting increase in raw-material prices raised production costs in related industries, with the burden ultimately passed on to consumers.
The prosecution stated, "We will continue to respond sternly to various fair-trade offenses in accordance with the law and principles even after the reform of the criminal justice system, so that collusive offenses causing major damage to the national economy are eradicated and a free and fair competitive order is established."
 
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