Two Petrochemical Executives Arrested over Trillion-Won Price-Fixing Collusion

Two current and former executives of domestic petrochemical companies have been arrested on suspicion of colluding to fix prices of petrochemical products.

On September 19, Judge Lee Ji-young, who is in charge of warrants at the Seoul Central District Court, issued detention warrants for Mr. Bae and Mr. Hwang, both accused of violating the Fair Trade Act, citing concerns over potential destruction of evidence.

Former PKC CEO Youngsoo Jang, who is accused of violating the Fair Trade Act, is heading to the courtroom on the 18th at the Seoul Central District Court in Seocho-gu, Seoul, to undergo a pre-arrest hearing. Photo by Yonhap News Agency

Both individuals previously served as high-ranking executives—including PKC Head of Sales, LG Chem Division Manager, and heads of overseas subsidiaries. They remained in their roles until the first half of this year, but it is unclear whether they are still employed amid the ongoing prosecution investigation.

However, the court dismissed the prosecution’s detention warrant requests for the remaining six suspects, including former PKC CEO Youngsoo Jang and OCI CEO Kim Yusin.

Judge Lee stated regarding Jang, "The suspect is contesting the charges, so there is a need to guarantee the right to defense, and considering the progress of the investigation, it is difficult to conclude that there is a risk of evidence destruction. At this stage, it is hard to recognize the necessity and appropriateness of detaining the suspect."

Regarding CEO Kim, Judge Lee also determined, "There is insufficient evidence to justify detention based on the suspicion of a crime, so there is a need to guarantee the right to defense. Given the circumstances of the investigation, there does not appear to be a risk of destruction of evidence or flight. Therefore, at this stage, it is hard to recognize the necessity and appropriateness of detaining the suspect."

Seven companies—PKC, OCI, LG Chem, Hanwha Solutions, Aekyung Chemical, Lotte Fine Chemical, and UNID—are under prosecution investigation for allegedly conspiring in advance to raise prices for eight petrochemical products, including PVC, plasticizers, caustic soda, and hydrochloric acid.

PVC, which is produced mainly using naphtha, is a synthetic plastic widely used in construction materials, pipes, and wire coatings. Plasticizers are chemical additives that make PVC soft and flexible.

The prosecution believes these companies took advantage of a period of disrupted naphtha supply caused by war in the Middle East to collude on prices, reaping illicit profits amounting to trillions of won. Last month, authorities conducted a search and seizure operation, and on September 10, key suspects were summoned for questioning.

The prosecution is also investigating the possibility that these companies engaged in price collusion not only during the Middle East war, but since 2021. If confirmed, the scale of collusion could exceed 10 trillion won, far surpassing previous estimates.

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