[Exclusive] Prosecution Requests Complaint Against Daesang, Sajo, and Two Others for Starch Sugar Price-Fixing...Expands Probe to Top Executives

Sufficient Evidence Secured to Support Allegations
Top Executives, Including CEOs, Also Targeted
Prosecution Requests Complaint Immediately After Raids; Sanctions to Accelerate
President Lee: "Permanent Expulsion" Policy to Eradicate Collus

The prosecution has exercised its right to request the Fair Trade Commission (FTC) to file criminal charges against four major domestic food companies suspected of colluding to fix the price of starch sugar. This move comes after the authorities launched a raid on these companies on February 23, signaling the start of formal criminal proceedings. It is reported that the prosecution has secured sufficient evidence supporting allegations of corporate-level collusion. Consequently, the prosecution is expected to proceed with a second request for criminal charges targeting the CEOs and other top-level executives who planned and led the collusion.

According to reporting by The Asia Business Daily on March 4, the Fair Trade Investigation Department of the Seoul Central District Prosecutors' Office, headed by Chief Prosecutor Na Heeseok, exercised its right to request criminal charges against four corporations—CJ CheilJedang, Daesang, Sajo CPK, and Samyang Corporation—at the end of last month. On February 23, the prosecution had already conducted simultaneous compulsory investigations into these companies.

This investigation is focused on allegations of "collusion in the pricing of starch sugar and its by-products," which are core ingredients in food manufacturing such as glucose, fructose, corn syrup, oligosaccharide, alternative sweeteners, and gluten. Starch sugar is a key ingredient used to add sweetness or viscosity to processed products like confectionery, ice cream, beverages, and dairy products. Before launching the investigation, the prosecution analyzed the case and concluded that the scale of this starch sugar collusion was even larger than previously uncovered cases involving sugar or flour price-fixing, and that it had a significant negative impact on consumer prices felt by the general public.

The prosecution's immediate exercise of its right to request criminal charges following the raid is interpreted as an indication that they had already secured crucial physical evidence to prove the collusion. The authorities are continuing to conduct raids not only on the headquarters but also at certain field locations to secure further evidence.

Due to the prosecution's involvement, the FTC's sanction procedures are also expected to accelerate rapidly. Under the Fair Trade Act, if the Prosecutor General requests the FTC to file criminal charges, the FTC is obligated to comply. As a result, the FTC's subsequent actions are expected to focus on determining whether to impose fines, corrective orders, and other administrative sanctions, in addition to the criminal charges against the four corporations.

The investigation is now zeroing in on the upper echelons of the collusion cartel. The prosecution is currently investigating dozens of employees and executives involved in the long-running starch sugar price-fixing, and based on the findings, plans to further exercise its right to request criminal charges against those with more serious involvement.

This prosecutorial approach is a continuation of recent investigations into cartels in flour, sugar, and electricity (bidding at Korea Electric Power Corporation) involving collusive practices worth approximately 10 trillion won, which resulted in mass indictments. In the sugar price-fixing case, two executives of sugar companies were indicted and detained, while nine others were indicted without detention. In the flour price-fixing case, 20 individuals, including the CEOs of six companies, were indicted without detention. The prosecution is also expected to focus on identifying the involvement of top-level executives in the starch sugar case to root out collusive activities at their source.

President Lee Jae-myung is speaking at the senior secretaries meeting held at the Blue House on the 19th. Photo by Yonhap News

On February 19, President Lee Jaemyung stated, "Collusive acts that abuse market dominance are a cancer that obstructs fair competition, undermines market trust, and hinders the development of the national economy," adding, "If such anti-market conduct is repeated, we should actively consider permanently expelling such companies from the market altogether."

Meanwhile, the FTC, which received the request for criminal charges, is expected to soon conclude its own investigation into the starch sugar collusion. On February 24, at a cabinet meeting, FTC Chairman Joo Byungki reported to President Lee that "the investigation into starch sugar will be concluded in early March." With the prosecution's request for criminal charges added to the process, it is expected that the timing and severity of administrative sanctions such as fines and corrective orders against the companies involved will be brought forward.

This content was produced with the assistance of AI translation services.