It was found out that foreign banks such as Deutsche Bank and JP Morgan Chase Bank fixed prices while trading foreign derivative products with South Korean companies.
Fair Trade Commission (FTC) announced that it levied total of $615,785 (693 million KRW) fine on Deutsche Bank, JP Morgan Chase Bank, Standard Chartered Bank Korea, and HSBC (Hong Kong and Shanghai Bank) for collusion.
These four banks fixed prices that they offered to five South Korean businesses 7 times between March of 2010 and February of 2012.
These banks offered same or similar prices to prevent competitions and to increase transaction prices whenever a company cut deals with many banks on same conditions after dividing amount of foreign derivative products. Collusion took place during Yen-Won currency swap (Deutsche Bank, JP Morgan Chase Bank, HSBC) in 2010 and Dollar-Won forward exchange transaction (Deutsche Bank, HSBC) in 2011.
Whenever a company selected one bank out of different candidates, banks already agreed on a price beforehand so that this particular bank cuts a deal with a corresponding company. Deutsche Bank offered a lower or similar price as that of HSBC and Standard Chartered Bank Korea during forward exchange transactions and foreign exchange swap transactions that had taken place 5imes.
“Collusion between banks caused companies to spend more money and impeded decision-making and competitions.” said Ahn Byung-hoon, who is the head of FTC’s International Cartel Department.
FTC levied $188,378 (212 million KRW) fine on Deutsche Bank, $223,033 (251 million KRW) fine on JP Morgan Chase Bank, $4,443 (5 million KRW) fine on Standard Chartered Bank Korea, and $199,930 (225 million KRW) fine on HSBC. South Korean prosecutors did not charge these banks due to statute of limitation.
“These fines will prepare internal control devices towards illegal acts of employees and raise overall awareness of bank industry towards fair trades.” said Ahn Byung-hoon.
Staff Reporter Yoo, Seonil | ysi@etnews.com