September 12, 2012 / 7:43 AM / 7 years ago

U.S. seeks $1 billion fine on AU Optronics over LCD price-fixing

(Reuters) - The U.S. government has asked a federal court to impose a $1 billion fine on Taiwan’s AU Optronics Corp (2409.TW) over its role in a cartel that fixed the prices of liquid crystal display (LCD) panels over a number of years, a court document showed.

The government has also asked the court to sentence company executives H.B. Chen and Hui Hsiung to 10 years in prison and fines of $1 million be levied on them, according to a sentencing memorandum prepared by the U.S. Justice Department ahead of a hearing set for September 20.

AU Optronics, the world’s No.4 LCD maker, was found guilty in March of fixing prices for the screens after an investigation into an alleged price-fixing cartel operating between 1999 and 2006 involving a number of companies. It had been the sole Asian LCD maker to plead not guilty.

The Justice Department said at the time that AU could face a maximum fine of $1 billion.

One of the other defendants, South Korea’s LG Display Inc (034220.KS), agreed to pay a $400 million fine in 2008.

U.S. prosecutors accused AU Optronics executives of meeting more than 60 times at luxury hotels to fix panel prices, saying the conspiracy cost the U.S. economy billions of dollars.

“AU Optronics and its executives conspired with the other major makers of TFT-LCD panels to systematically fix prices. The conspiracy lasted five years, ending only when the FBI raided their offices and a federal grand jury subpoenaed the conspirators’ records,” the Justice Department said in the filing.

In a separate sentencing memorandum filing, AU Optronics said it should face a fine of no more than $285 million.

“The fine pressed by the government would threaten the very existence of AU Optronics,” the company said. AU declined further comment.

The case is in re United States of America vs. AU Optronics, Case No. 09-cr-00110, U.S. District Court, Northern District of California, San Francisco division.

Reporting by Sakthi Prasad in BANGALORE and Clare Jim in TAIPEI; Editing by David Holmes and Muralikumar Anantharaman

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