[Edaily Reporter BAEK JU-A ] Prosecutors investigating allegations of price-fixing in the petrochemical industry are summoning executives from major companies, including former CEO PaikkwangIndustrial(001340) and an executive from LGCHEM,LTD(051910), for questioning one after another. Following raids last month on seven petrochemical companies—including LGCHEM,LTD andHANWHA SOLUTIONS(009830) —the investigation into company executives appears to be gaining momentum. The scale of the price-fixing in this case is reportedly the largest ever among price-fixing cases investigated by prosecutors.

According to legal circles on the 10th, the Fair Trade Investigation Division of the Seoul Central District Prosecutors’ Office (headed by Chief Prosecutor Na Hee-seok) summoned and is questioning Jang Young-soo, former CEO of PKC, and an executive vice president of LGCHEM,LTD’s PVC and plasticizer business division, both of whom are suspected of violating the Fair Trade Act. The CEO of OCI(456040) is also reportedly being questioned by prosecutors today. The investigation into the CEO of HANWHA SOLUTIONS has reportedly already been concluded.

Early last month, prosecutors conducted raids on seven companies—including LGCHEM,LTD, HANWHA SOLUTIONS, AEKYUNG CHEMICAL(161000), OCI, LOTTE Fine Chemical(004000), PKC, and UNID(014830) —and approximately 80 related individuals. These companies are accused of colluding for several years to fix the prices of eight petrochemical products—including PVC, caustic soda, plasticizers, hydrochloric acid, chlorine, and hypo—by taking advantage of supply disruptions in naphtha caused by the war in the Middle East.

PVC is a synthetic plastic produced from naphtha and other raw materials. It is used in various fields, including construction materials, pipes, and wire insulation. Plasticizers are chemical additives that impart softness and flexibility to PVC. Price increases for these products could lead to higher cost burdens for the construction and manufacturing industries.

Observers note that this investigation aligns with the government’s stated policy of strictly responding to price manipulation, as it specifically targets price manipulation involving processed products made from petroleum. The scale of this case is reportedly the largest among antitrust cases investigated by prosecutors over the past 78 years. The previous record was a 14 trillion won oil refinery price-fixing case indicted last July.

The Fair Trade Commission also launched on-site investigations into petrochemical companies last May. However, it is understood that the investigation notice covered only three items: PVC, plasticizers, and caustic soda. As the prosecution has begun summoning key suspects for questioning, it is suggested that the results of the prosecution’s investigation may be released before those of the Fair Trade Commission.

The Fair Trade Investigation Division of the Seoul Central District Prosecutors’ Office has handled a series of large-scale cartel cases this year involving key industries that affect people’s livelihoods, such as food and oil refining. Last February, it indicted 52 executives and employees on charges of participating in a cartel worth approximately 10 trillion won in the flour, sugar, and electricity sectors. At the time, President Lee Jae-myung offered encouragement via social media (SNS), stating, “The prosecution has achieved significant results.”

Last April, the division referred CJ CheilJedang Corp(097950),Daesang(001680), and Sajo CPK to trial on charges of price-fixing for starch syrup worth around 10 trillion won. Subsequently, in July, it indicted four oil refiners—SK Energy, GS Holdings, HD HYUNDAI Oilbank, and S-Oil—on charges of oil price-fixing. It also handled the case involving improper financial support provided to the family of the head of the Sampyo Group and cases involving the abuse of dominant market position by accommodation platforms such as Yanolja and Yogiyeotdae.