Japan PP probe may not meet deadline

26 February 2001 00:00  [Source: ACN]

THE Japan Fair Trade Commission (JFTC) may not be able to complete its ongoing investigation into suspected price-fixing by seven domestic PP producers by 30 May, the deadline set last year, sources close to the producers told ACN.

The JFTC set itself the 30 May deadline because it was concerned the longer it took to complete the investigations, the longer any unfair pricing practices would remain.

When the JFTC launched the probe against all seven Japanese PP players at the end of May 2000, a JFTC official said that it would be completed in six months to a year (ACN 5 June, p5).

The major reason for the expected delay in the completion of the inquiry is that the evidence JFTC has managed to gather so far regarding the price-fixing allegations is insufficient to reach a conclusive decision, said a source close to one of the producers under investigation. JFTC officials were not available for comment.

The investigation, the first against Japanese PP producers in 25 years, involves all the major PP producers in Japan.

In February 1974, PP producers were forced to retract two price hikes from November 1973 after they were found guilty of price fixing.

On 30 May last year, the JFTC raided more than 20 offices belonging to Sumitomo Chemical, Tokuyama Corp, Japan Polychem, Grand Polymer, Idemitsu Petrochemical, Chisso Petrochemical and Sun Allomer, the recently renamed Montell Sunrise SDK.

A JFTC official had indicated to ACN last year that the commission would scrutinise the seized documents, including electronic mail and hard copy, to ascertain if there was any proof of a 'concerted intention' to raise prices, and evidence of a co-ordinated effort to do so.

It is unclear what penalties could be levied if the producers are found to have fixed prices.

Of the 40-50 cases for all products investigated in the financial year 1999-2000, only 20 were fined. The rest were issued a recommendation that they stop the infringement of the law and inform customers that an investigation had been conducted into the infringement. They were also warned not to repeat the offence.

In rare cases when criminal charges are brought against the offender, a maximum two-year prison sentence can be imposed, along with a fine. The individuals facing imprisonment can be the chief executive officer or chief operating officer, as well as officers directly involved in the violation, ACN was told.

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