China fines NSK and NTN following probe into industry pricing practice

Article by Christian A., on August 21, 2014

China’s National Development and Reform Commission has imposed a combined JPY4.8-billion ($47 million) fine against Japanese bearing makers NSK Ltd. (JPY2.9 billion) and NTN Corp. (JPY1.9 billion) for violating rules in a probe into industry pricing practices. The fine was disclosed by the suppliers in their statements to the Tokyo Stock Exchange.

China is taking onto a new level its anti-monopoly probe that has so far pressured at least seven foreign carmakers into trimming prices. The NDRC recently disclosed that it completed a probe into 12 Japanese companies and would impose fines on violators.

Toshiaki Yamaguchi, a lawyer specializing in corporate compliance, remarked that China has been cooperating globally in terms of international issues like cartels. He added that this should serve as a wake-up call for companies not to engage in suspicious behavior that may be seen as a cartel.

China has an anti-monopoly law allowing the government to impose fines of up 10 percent of a company’s annual revenue, although those who cooperate could receive lighter penalties. According to NSK, it will take “comprehensive measures” to make that it strictly complied with the laws, adding that it will disclose any revision to its full-year forecast as a result of the fine.

NSK spokesman Taketoshi Tanoue said the violations were for the period 2000 to June 2011. Japan’s antitrust authority imposed fines against NSK in 2013 for fixing prices of bearings. NDRC has also probed into pricing practices of vehicles, after-sales maintenance and spare parts.

The probe has prompted a number of carmakers like Audi, Mercedes-Benz and Toyota Motor to cut prices. The European Union Chamber of Commerce in China – boasting around 1,800 members in it fold – recently said that Chinese probers were picking on foreign companies, even pressuring them into accepting punishments while depriving them of full hearings. [source: Bloomberg.com]

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Topics: china

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