Six domestic petrochemical companies and their executives, accused of conspiring to fix prices of polyvinyl chloride (PVC) and plasticizers by taking advantage of Middle East conflicts, have been sent to trial.

The Fair Trade Investigation Division of the Seoul Central District Prosecutors' Office (led by Senior Prosecutor Na Hee-seok) announced that it has indicted the six petrochemical firms for violating the Fair Trade Act.

Initially, prosecutors investigated seven companies, including LG Chem, Hanwha Solutions, Aekyung Chemical, OCI, Lotte Fine Chemical, PKC, and Unid, but chose to bring six of them to trial.

Forty-three current and former CEOs and employees from the six companies involved in the collusion, including OCI Vice Chairman and CEO Kim Yu-shin and former PKC CEO Jang Young-soo, were also indicted.

Bae, a former head of sales at PKC, and Hwang, a former business division head at LG Chem, were indicted and detained.

According to prosecutors, they are accused of carrying out a price-fixing scheme amounting to 16.3961 trillion won across eight petrochemical products, including PVC, plasticizers, caustic soda, and hydrochloric acid, from January 2021 to April of this year.

PVC, which uses naphtha as its main ingredient, is a synthetic plastic widely used in building materials, pipes, and wire insulation, while plasticizers are chemical additives used to make it soft and flexible.

Investigations showed they committed the crimes by agreeing on the range and timing of supply price fluctuations or by coordinating bidding prices for client contracts.

In particular, for large clients, they reportedly discussed winning bidders and bidding prices in advance to maintain their respective market shares while ensuring the mutually agreed price levels were reflected.

The collusion was mainly carried out through team-leader-level meetings, and they even predetermined the order in which price hike official notices would be executed to conceal the price-fixing.

When new successors took office, they introduced them to other companies to ensure the collusion continued, and some firms even displayed organized behavior by designating specific staff members exclusively responsible for communicating with competitor officials, according to prosecutors.

Prosecutors pointed out that they exploited national crises such as inflation caused by wars between the United States and Iran.

Despite the government providing 146.5 billion won to stabilize petrochemical production after international petroleum product prices surged immediately following the US-Iran war, the companies continued their collusion.

A prosecution official explained, "We confirmed that even while discussions on subsidies for price stabilization were underway amid a national crisis, some companies actually exploited the economic crisis as an opportunity to improve profitability and continued price-fixing."

Prosecutors initiated coercive investigations by raiding the offices of the seven companies in August, and summoned key suspects including CEO Kim and former CEO Jang for questioning last month.

Subsequently, prosecutors requested arrest warrants for six individuals, including former CEO Kim and former CEO Jang, but the court dismissed them.

(Photo: Yonhap News)