Prosecutors to Investigate Price-Fixing Charges

Prosecutors plan to launch an investigation as soon as the Fair Trade Commission (FTC) files a suit against six flour mill companies, including the Y corporation, entangled in a political scandal because its owner played golf with Prime Minister Lee Hae-chan on Independence Movement Day, for colluding to fix flour prices.

Seoul District First Deputy Chief Prosecutor Kim Young-chul said on March 8, “Which division and how the investigation will be conducted is an issue that will be decided internally after the suit is filed.” Seoul District Prosecutor’s Office Criminal Department VI, specializing in fair trade and led by Han Seung-chul, is likely to take the case.

If politicians or civic groups file a suit accusing the Y Corporation’s owner of playing golf with Prime Minister Lee to influence the FTC’s probe, the possibility of golf lobbying will also be subject to investigation.

The FTC plans to file a suit against the six companies and five owners to the prosecutor’s office around March 24.

The FTC summoned the Y company’s owner and vice-president “B” under charges of fixing flour prices and supply on October 5 2005, but decided only to file a criminal suit against vice-president “B.”

Han Chul-soo, chief of the FTC Cartel Bureau stated on March 8, “We decided not to sue the Y company owner because he was serving time in jail for meddling with stock prices and hence absent at the price-fixing meeting of 2002, and we found no evidence of him ordering price fixing.”

The FTC started to probe into flour price-fixing around August of 2004, and one month later Prime Minister Lee had a meal with the Y company owner and others after they finished playing golf.

Hyun-Jin Park woogija@donga.com witness@donga.com