Prosecutors raided 7 petrochemical firms in August

The Supreme Prosecutors' Office and the Seoul Central District Prosecutors' Office in Seocho-gu, Seoul. (Yonhap)
The Supreme Prosecutors' Office and the Seoul Central District Prosecutors' Office in Seocho-gu, Seoul. (Yonhap)

Prosecutors investigating petrochemical companies over allegations that they colluded on product prices have summoned OCI Vice Chairman and CEO Kim Yu-sin for questioning as a suspect. The move comes as prosecutors step up their investigation into existing unfair trade cases ahead of next month's abolition of the prosecutors' offices.

According to The Herald Business on Thursday, the Fair Trade Investigation Division of the Seoul Central District Prosecutors' Office has been questioning Kim as a suspect since 10 a.m. that day. The division is headed by Na Hee-suk. He faces charges of violating the Monopoly Regulation and Fair Trade Act.

Kim previously served as head of OCI's Chemical Business Division, then as vice president and CEO, before being promoted to vice chairman, the post he currently holds. He also serves as a director of the Korea Chemical Industry Council and an auditor of the Korea Chlor-Alkali Association. Prosecutors reportedly summoned Kim only after completing a working-level investigation and moving up the chain to him.

Prosecutors are investigating seven petrochemical companies — OCI, LG Chem, Hanwha Solutions, Aekyung Chemical, Lotte Fine Chemical, PKC and Unid — on suspicion of colluding for years to raise prices. The alleged collusion involved eight petrochemical products, including polyvinyl chloride plasticizers, caustic soda and hydrochloric acid.

PVC is a synthetic plastic made primarily from naphtha, while plasticizers are chemical additives that soften PVC. Prosecutors reportedly launched the investigation after detecting signs that the companies had prearranged price increases as the Middle East war destabilized naphtha supplies.

Prosecutors launched a compulsory investigation early last month, raiding the seven petrochemical companies. The Korea Fair Trade Commission had earlier conducted an on-site probe of petrochemical firms in May. However, prosecutors reportedly proceeded with their own compulsory investigation independently of the commission's probe.

Prosecutors' offices are set to be abolished in October and replaced by a new serious crimes investigation office and a public prosecution office. Amid this transition, prosecutors are concentrating their investigative resources on collusion cases tied to the livelihoods of ordinary citizens. The Fair Trade Investigation Division at the Seoul Central District Prosecutors' Office confirmed collusion among four oil refiners in July. The refiners — HD Hyundai Oilbank, SK Energy, GS Caltex and S-Oil — had colluded on fuel prices, and the division indicted them.

The division also raided the Korean offices of global semiconductor parts makers — China's Montage Technology, Japan's Renesas Electronics and the US's Rambus. Prosecutors allege the companies colluded on prices while supplying semiconductor components to Samsung Electronics and other clients.

Separately, the Criminal Proceeds Recovery Division at the Seoul Central District Prosecutors' Office investigated MK Electron, LT Metal and Duksan Hi-Metal Co. over alleged collusion on supply prices for key semiconductor materials. The division, headed by So Jeong-su, indicted MK Electron on Aug. 13 along with five current and former executives, including former and current CEOs.


bell@heraldcorp.com