Fines for panel firms symbolic: expert

SUPPORT::The Ministry of Economic Affairs said it has contacted four local companies to understand the consequences of the Chinese penalty and provide assistance if necessary

Staff writer, with CNA

Mon, Jan 07, 2013 - Page 14

The fines imposed by Chinese authorities on six flat-panel makers, including four from Taiwan, for conspiring to fix prices seem to be merely symbolic given the small size of the fines, a market analyst said.

David Hsieh (謝勤益), DisplaySearch’s vice president for the Greater China market, on Friday said that compared with the substantial fines imposed by US courts for the same acts of price manipulation, the fines imposed by Chinese authorities are not likely to substantially affect the operations of the four Taiwanese firms.

China’s National Development and Reform Commission on Friday imposed a total of 353 million yuan (US$56.7 million) in fines on six flat-panel makers for price fixing from 2001 to 2006.

The Taiwanese firms involved are Chimei Innolux Corp (奇美電子), AU Optronics Corp (AUO, 友達光電), Chunghwa Picture Tubes Ltd (中華映管) and HannStar Display Corp (瀚宇彩晶), the commission said.

Chimei Innolux changed its name to Innolux Corp at the beginning of this year.

The other two manufacturers accused of manipulating prices in the six-year period are South Korea’s Samsung Electronics Co and LG Display Co, the commission said.

The commission said that the six companies held a total of 53 meetings in Taiwan and South Korea during the six-year period to exchange market information in a bid to manipulate product prices.

China’s penalty was only a fraction of the almost US$1.4 billion in criminal fines imposed by US courts on various companies from Taiwan, South Korea and Japan, Hsieh said.

No Japanese firms were involved in the Chinese ruling because they did not sell any flat screens in China during that period, Hsieh said.

The fine of 353 million yuan includes 172 million yuan in overcharging resulting from the price fixing scheme, Hsieh said.

He added that the six companies have already paid that sum to Chinese TV vendors at the request of Chinese authorities.

As a result, the remaining fines are unlikely to affect the companies’ bottom lines, he added.

According to the commission, Innolux was fined 94.41 million yuan, AUO 21.89 million yuan, Chunghwa Picture Tubes 16.20 million yuan and HannStar 240,000 yuan.

The Ministry of Economic Affairs said it has contacted the four flat-panel suppliers in an effort to better understand the consequences of the financial penalty.

The ministry said it has promised to provide assistance to the four companies if necessary.

Market observers said Chinese flat panel makers have been trying to lure Taiwanese personnel by offering attractive remuneration packages, which is likely to have a more serious impact on the local screen business than price fixing fines.