NDRC Fines 18 PVC Resin Firms USD69 Million for Price-Fixing Carried Out Via Private WeChat Group
Xu Wei
DATE:  Sep 27 2017
/ SOURCE:  Yicai
NDRC Fines 18 PVC Resin Firms USD69 Million for Price-Fixing Carried Out Via Private WeChat Group NDRC Fines 18 PVC Resin Firms USD69 Million for Price-Fixing Carried Out Via Private WeChat Group

(Yicai Global) Sept. 27 -- China's National Development and Reform Commission (NDRC) has imposed fines totaling USD69.24 million (CNY457 million) on 18 PVC resin enterprises due to repeated price collusion which pushed up market prices significantly, the commission said on its website on Sept. 27.

The amount of the financial penalties was based on 1 to 2 percent of sales made by the 18 enterprises in 2016.

Six listed chemical companies, including Sichuan Jinlu Group Co. [SHE:000510] and Inner Mongolia Junzheng Energy and Chemical Group Co. [SHE:601216], were fined a total USD15 million (CNY100 million), Securities Daily reported.

The companies reached a monopolistic agreement with competitors through a private group set up on Tencent Holdings Ltd.'s [HKG:0700] social media app WeChat.

The 18 companies concerned produced a cumulative 12 million tons of PVC in 2016, making up three-quarters of China's total output, and their business conduct significantly affected the industry, the NDRC said.

The firms held six meetings between March and December 2016 through a WeChat group named Northwest Chlor-Alkali Union. They exchanged market quotes, discussed production and sales volume, and decided 13 price monopoly agreements, the investigation found.

Hubei Yihua Group Co. and Jilantai Salt Chemical Group Co. led the organization of the meetings, taking on the roles of secretary-general and president, respectively. The remaining 16 enterprises responded to and supported the markup proposals put forward.

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Keywords:   MSCI,Sichuan Jinlu Group,Inner Mongolia Junzheng Energy & Chemical Industry,Monopoly