Former and current employees of CJ CheilJedang and Samyang Corporation, who were indicted on charges of colluding to fix sugar prices worth about 3 trillion won, received suspended prison sentences. In legal circles, some noted that to break the cycle of repeated collusion crimes, the employees involved should have been given actual prison terms.
On the 23rd, Judge Ryu Ji-mi of the Seoul Central District Court Criminal Division 5 Single-Judge Panel sentenced former CJ CheilJedang Food Korea head Kim Sang-ik, who was detained and indicted on charges of violating the Monopoly Regulation and Fair Trade Act, to two years and six months in prison, suspended for three years, and former Samyang Corporation CEO Choi Nak-hyun to two years and six months in prison, suspended for three years. Other defendants who were brought to trial on the same charges also received fines and suspended prison sentences.
The court said the defendants' offenses were serious and that, although CJ CheilJedang and Samyang Corporation had previously been caught in collusion cases, they committed the crimes again, so their culpability is not light. However, it cited as sentencing factors that it was difficult to see the companies as having reaped excessive profits considering trends in raw sugar (sugar raw material) prices and exchange rates, and that the defendants are reflecting on their actions.
◇Perception of "it will be suspended anyway"… Prosecutors stress the need to punish individuals
At the sentencing hearing on the 9th, prosecutors sought prison terms for the defendants, saying, "This case is not a personal deviation but an organized crime that involved even corporate representatives, and there is a need to sound an alarm to a market that takes collusion crimes lightly."
Prosecutors said they found the ruling somewhat disappointing. A prosecution official said, "We respect the court's judgment, but given the scale of the collusion in this case and precedents in similar cases, it is difficult to agree," adding, "We will need to review the written judgment, but we will appeal."
The Ministry of Justice also says individual punishment should be strengthened in collusion cases. Minister Jung Sung-ho wrote on Facebook in Feb. that "to eradicate organized collusion, we should, like the United States, significantly toughen criminal penalties for individuals such as employees who planned and executed the collusion and those behind it."
This is because among corporations involved in collusion, there is a widespread perception that individual employees do not bear real responsibility. In fact, according to what is known from in-house meeting recordings obtained by prosecutors during the recent intensive investigation of collusion cases, remarks were made to the effect that "it will end with a fine anyway," "it will be wrapped up with a suspended sentence," and "the company will take responsibility, so don't worry."
◇In the United States, collusion can bring up to 10 years in prison
Overseas, corporate executives responsible for collusion crimes are sometimes sentenced to actual prison terms and incarcerated. The U.S. Department of Justice in Jan. 2011 imposed a $470 million fine (about 530 billion won at the exchange rate at the time) on Japanese auto parts company "Yazaki" for price collusion. Four Yazaki executives of Japanese nationality received prison sentences of up to two years to be served in U.S. prisons. In the United Kingdom, in Jun. 2008, three corporate officials who colluded on prices for marine hoses were sentenced to between two years and six months and three years in prison.
In Jun. 2020, Makan Delrahim, Assistant Attorney General for the U.S. Department of Justice Antitrust Division, said at a meeting of the Organisation for Economic Co-operation and Development (OECD) Competition Committee that "vigorous criminal enforcement against individuals can send a strong message and enhance deterrence."
Some say statutory maximum penalties for collusion should be raised. In Korea, the Monopoly Regulation and Fair Trade Act caps individual penalties for serious violations such as collusion at up to three years in prison or a fine of up to 200 million won. In contrast, the United States allows up to 10 years in prison or a fine of up to $1 million (about 1.4831 billion won), the United Kingdom allows up to five years in prison or an unlimited fine, and Canada allows up to 14 years in prison or an unlimited fine.
Park Yong-chul, a professor at Sogang University Law School, said, "To improve the effectiveness of punishment, strengthening the punishment of individual employees is an intuitively convenient approach," adding, "However, it is essential to consider the extent to which an individual employee had authority over the collusive conduct."