Samsung, LG Philips and Sharp hit by probe
BySong Jung-a in Seoul
December 12 2006
An investigation into alleged price fixing practices at the worldÃ¢â‚¬â„¢s leading flat panel display makers on Tuesday dealt a fresh blow to an industry already plagued by falling prices.
Samsung Electronics, LG Philips and Sharp confirmed on Tuesday they were under investigation by authorities in the US, Japan and, in the cases of Samsung and LG, South Korea over alleged anti-competitive practices.
Shares in LG Philips plunged as much as 7.6 per cent to a record low before ending 4.6 per cent down at Won25,750 by the close of morning trading on concerns that the company may post bigger-than-expected losses in the current quarter.
The joint venture between South KoreaÃ¢â‚¬â„¢s LG Electronics and Philips of the Netherlands said Tuesday that its San Jose, California office received a subpoena from the US Department of Justice while the Japanese Fair Trade Commission issued a notice to its offices in Tokyo. Officials from the Korean Fair Trade Commission also visited its headquarters in Seoul on Friday.
A spokesman for the KFTC said the antitrust watchdog was investigating LG Philips on price-fixing charges. The investigation is reportedly focused on whether LCD makers colluded on prices and supplies a couple of years ago when the industry was in an upturn.
Ã¢â‚¬Å“LG Philips LCD takes this matter very seriously and will cooperate fully with regulatory authorities,Ã¢â‚¬ the company said in a statement.
The company has suffered net losses of Won643bn ($700m) over the past two quarters, hit by continued price falls in TV panel prices as LCD makers expanded capacity for large screens.
Analysts expect the company to remain in the red through the first half of next year, as oversupply continues to weigh on the sector. But they said the company could return to the black by the third quarter of next year, helped by its efforts to cut costs and improve productivity.
Samsung, which overtook LG Philips as the worldÃ¢â‚¬â„¢s largest LCD panel maker earlier this year, also confirmed on Tuesday that it had received subpoenas from US and Japan authorities and was also being investigated in South Korea.
Samsung pledged full cooperation with the investigation and said it is Ã¢â‚¬Å“strongly committed to fair competition and ethical practices and forbids anti-competitive behaviour.Ã¢â‚¬
Its shares edged down 0.5 per cent to Won601,000 by early afternoon.
Copyright The Financial Times Limited 2006