Mitsui Chem will pay fine for price fixing

14 April 2003 00:00  [Source: ACN]

Mitsui Chemicals will not contest the fine imposed on it for price fixing, even though it was not guilty of the misdemeanour, a company source told ACN.

'The company will pay up,' the source said.

The Japanese Fair Trade Commission (FTC) had fined Mitsui Yen760m (US$6.4m) - along with Japan Polychem (about Yen845m) and Chisso Corp (about Yen435m) - for agreeing to raise the price of PP by Yen10/kg in 2000.

The company was, however, not one of the parties charged for price-fixing. It became guilty by default, because it had absorbed the original guilty party, Grand Polymer, in April last year.

The FTC had charged Grand Polymer with forming a price cartel with Japan Polychem, Chisso, Sumitomo Chemical, Idemitsu Petrochemical, Tokuyama Corp, and SunAllomer (formerly Montell SDK Sunrise).

The cartel, the Mitsui source said, operated for six months - from April to September 2000.

An FTC source had earlier told ACN that the FTC imposes two kinds of penalties for price collusion (ACN 24 Mar, p6). The first, for a 'simple' case of price fixing, is a surcharge of 6% of a company's sales during the period of collusion. Hence Mitsui's fine of Yen760m is 6% of Grand Polymer's PP sales of Yen 12.6bn during April-September 2000, the Mitsui source said.

The second penalty is imposed when the FTC decides that a cartel has 'criminal' intentions - such as doing irreparable damage to rival firms. The penalty in this case is a maximum fine of Yen500m for each member of the cartel, plus up to three years' jail for directors of the cartel's member companies.

Four of the companies charged with being part of a cartel - Sumitomo, Idemitsu, Tokuyama, and SunAllomer - are contesting the case.

A source at Sumitomo said the company 'does not agree' with the collusion charges and will continue arguing its case with the FTC. 'The FTC has not imposed any penalty on Sumitomo yet,' he added. 'A further hearing will be held. This could take a long while to resolve.'

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