TAIWAN-BASED AU Optronics was fined $500 million by a US judge for price fixing in the market for liquid crystal display panels, but the company’s shares jumped as much as 5 per cent early yesterday amid relief the fine wasn’t larger.
US district judge Susan Illston in San Francisco also handed down three-year prison sentences to two individual defendants on Thursday.
A jury convicted the company and two AU executives, Hsuan-Bin Chen (60) and Hui Hsiung (58), in March. Former AU chief executive LJ Chen, who remains a top executive at the company, was acquitted at the trial.
AU was charged as part of an investigation into an alleged price-fixing cartel between 1999 and 2006. Several other companies, including LG Electronics, have pleaded guilty in the LCD probe.
US prosecutors had accused company executives of meeting more than 60 times at luxury hotels to fix prices of LCD panels, saying the conspiracy cost the US economy billions of dollars.
Criminal trials against publicly traded companies are rare, and AU has said it would appeal its conviction. At the trial, AU’s lawyers asserted that the company “competed fiercely” and that the mere exchange of information between companies was not illegal.
AU, which has a market capitalisation of about $3.3 billion, had argued it should be fined no more than $285 million. US antitrust prosecutors had sought $1 billion.
AU shares jumped as much as 5 per cent yesterday, versus a broader market’s 0.49 per cent gain, because the fine was less than some investors had expected.
The Taiwanese firm said it will make an extra provision of $223 million this quarter.
“This was a documented, far-reaching, clearly illegal conspiracy to fix pricing,” Judge Illston said at Thursday’s hearing. She said she took into consideration fines imposed on other firms in the investigation, and the fact that AU had already incurred heavy costs in money and time for this trial.
Rival LG Electronics agreed to pay a $400 million fine in 2008, while Samsung Electronics Co Ltd cut an early deal to avoid prosecution.
AU was the sole Asian LCD maker to plead not guilty. – (Reuters)
