Zeon Chemicals, the Kentucky-based subsidiary of the Japanese Zeon Corporation, has agreed to plead guilty and to pay a $10.5 million criminal fine for participating in a conspiracy to fix the price of synthetic rubber.
The rubber, acrylonitrile-butadiene, which is also known as NBR, is used to manufacture hoses, belting, cable, o-rings, seals, adhesives, and sealants.
According to a one-count felony charge filed in the US District Court in San Francisco, from May 2002 through December 2002, Zeon conspired with unnamed co-conspirators to suppress and eliminate competition in the market for NBR.
The US Department of Justice charged that Zeon and those unnamed co-conspirators carried out the conspiracy by meeting to discuss the prices of NBR and agreeing, during those meetings, to raise and maintain prices.
Zeon was charged with violating Section 1 of the US Sherman Act, which carries a maximum fine of $10 million for corporations and a maximum penalty of three years imprisonment and a fine of $350,000 for individuals.
The maximum statutory fine imposed may be increased to twice the gain the conspirators derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
The fine will be posted as a loss in Zeon Corporation’s consolidated financial statement for the third quarter of the fiscal year ending March 31, 2005.