Chi Mei Optoelectronics Corp (奇美電子), the nation's second-largest liquid-crystal-display (LCD) panel maker, yesterday said it had agreed to plead guilty and pay a US$220 million fine for fixing prices for flat panels. Shares in the company tumbled 3.26 percent yesterday.
The Tainan-based company entered into a plea agreement with the US Department of Justice to resolve allegations of anticompetitive activities between September 2001 and December 2006, it said in a company statement issued before the Taiwan Stock Exchange opened yesterday.
Chi Mei shares fell NT$0.70 to close at NT$20.80, the lowest level since Nov. 30. The fine could push the panel maker into another quarterly loss this quarter after making its first three-month profit in more than a year last quarter.
“This is a rare case. We originally expected Chi Mei to break-even this quarter on falling prices. Those hopes are now dashed,” said Roger Yu (游智超), a flat-panel industry analyst with Polaris Securities Co (寶來證券).
The fine could bring the panel maker's losses to about NT$29 billion (US$898 million) for the full year, compared with NT$6 billion in losses last year. Chi Mei accumulated losses of NT$27.41 billion in the first nine months of this year.
“Besides, we fear there could be a knock-on effect,” Yu said.
Chi Mei said it planned to fully book the fine as a non-operating expense in the fourth quarter of this year.
“The disclosure aims to end recent speculation [about the price-fixing allegations] and to remove uncertainty [of a massive fine],”company spokesman Eddie Chen (陳彥松) said by telephone yesterday. “Chi Mei is not the first company to be fined. Six of the eight panel makers under investigation have pleaded [guilty to price fixing].”
Chi Mei said it would cooperate with the US Department of Justice's ongoing investigation.
So far, six Asian companies have pleaded guilty or have agreed to plead guilty in connection with the price-fixing probe, with fines totaling more than US$860 million.
The companies are Taiwan's Chunghwa Picture Tubes Ltd (中華映管), South Korea’s LG Display Co, Japan’s Sharp Corp, Hitachi Displays Ltd and Epson Imaging Devices Corp.
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