Prosecutors Indict MK Electron for 347.6 Billion Won Semiconductor Materials Collusion... First Case of Criminal Proceeds Preserved for Forfeiture

Price and Transaction Terms Collusion on Bonding Wires and Solder Balls

Five Current and Former Executives Indicted Without Detention

Real Estate Worth 1.22 Billion Won Preserved for Criminal Proceeds Forfeiture

MK Electron, a KOSDAQ-listed company, along with its current and former CEOs and other executives and employees, has been indicted for colluding with competitors on prices and transaction terms during the supply of semiconductor materials. Prosecutors stated that this is the first case in which criminal proceeds have been preserved for forfeiture with price collusion as the predicate offense.

On the 9th, the press was waiting in front of the Seoul Central District Prosecutors' Office building, where former Special Warfare Commander Kwak Jung-geun is reportedly being summoned for investigation by the Special Investigation Headquarters on Emergency Martial Law. Photo by Huh Younghan

The Criminal Proceeds Recovery Division of the Seoul Central District Prosecutors’ Office (headed by Chief Prosecutor Seo Jeongsu) announced on the 13th that it had indicted MK Electron and five current and former executives and employees without detention, on charges of violating the Monopoly Regulation and Fair Trade Act.

According to prosecutors, MK Electron is accused of reaching an agreement with competitors to raise prices after profitability worsened due to rising prices of raw materials, including gold, and increased market competition, in order to secure stable sales and profits. The investigation found that the company also colluded on other transaction terms, such as collectively responding to demands from customers for price reductions by agreeing to maintain existing prices.

The scale of the collusion amounted to 306.9 billion won for bonding wires from April 2020 to December last year, and 40.7 billion won for solder balls from May 2024 to December last year, totaling 347.6 billion won. Bonding wires are fine metal wires that electrically connect semiconductor chips and substrates, while solder balls are fine metal spheres that electrically and physically connect semiconductor chips and substrates.

This case originated from a direct investigation initiated by prosecutors. After identifying suspicions of collusion during the investigation, prosecutors filed an official complaint with the Fair Trade Commission under the name of the Prosecutor General, and proceeded to indictment after the complaint was accepted.

Prosecutors also took measures to forfeit the criminal proceeds gained through collusion. In order to confiscate the 1.22 billion won in criminal gains that MK Electron was found to have acquired from the offense, prosecutors preserved the company’s real estate for seizure, and the court approved this on July 31.

Prosecutors explained, "This is the first case in which price collusion has been recognized as the predicate offense under the Fair Trade Act and criminal proceeds have been preserved for forfeiture," adding that it is necessary to deprive offenders of economic benefits from collusion in order to block the incentive for such crimes.

From October 2, due to an amendment to the relevant law, prosecutors will no longer be able to directly investigate collusion cases. Prosecutors stated, "It will become fundamentally impossible for the prosecution to investigate collusion cases, in which we have built up long-term investigative expertise and know-how," adding, "We will do our utmost until the end to ensure free and fair market competition is maintained through thorough prosecution and recovery of criminal proceeds."

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