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April 20, 2007 12:40 pm

Samsung executive pleads guilty in US

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An executive of Samsung Electronics, the world's biggest memory chipmaker, has agreed to plead guilty to an international conspiracy to fix prices of D-Ram chips, the US Justice Department said.

Kim Il-ung, vice president of marketing for Samsung’s memory division, is the sixth Samsung executive to plead guilty to price-fixing charges. He agreed to pay a $250,000 criminal fine and to serve 14 months in a US prison, the longest imprisonment ever by a foreign defendant charged with price fixing in the US.

“We are committed to prosecuting executives who violate US antitrust laws and harm consumers and competition in the US, even when those executives conduct their cartel activity overseas,” said Thomas Barnett, assistant attorney general in charge of the department’s antitrust division.

The justice department investigation, which began in 2002, uncovered one of the largest case of price-fixing on record. It led to $730m in fines and guilty pleas by Samsung and three other manufacturers of D-Ram chips – Elpida, Hynix and Infineon. A fifth, Micron, admitted taking part, but avoided federal criminal charges by cooperating with the authorities.

Mr Kim participated in a conspiracy to raise and stabilise the price of D-Ram chips sold to certain original equipment manufacturers between April 2001 and June 2002, the department said. The violation directly affected sales to US computer makers such as Dell, Hewlett-Packard, Compaq, IBM, Apple and Gateway.

A total of 18 individuals have been charged as a result of the long-running antitrust investigation and of them, 15 people have been convicted. The five Samsung executives who already pleaded guilty in the US to price fixing agreed to each pay a $250,000 fine and to serve prison time.

“Samsung is strongly committed to fair competition and ethical practices and forbids anti-competitive behaviour,” Samsung said.

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