US firms sue Teo Siong Seng, shipping container makers over alleged price-fixing scheme
The suits from US companies were filed against Singamas, China International Marine Containers, CXIC Group Containers and a group of executives, including Mr Teo.
Pacific International Lines executive chairman Teo Siong Seng. (Photo: Facebook/Pacific International Lines)
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SINGAPORE: Shipping veteran Teo Siong Seng and other executives accused by the United States of conspiring to restrict output and fix the prices of dry containers have been sued by a pair of US firms.
The class-action lawsuits from manufacturer CA Spalding Company and shipping company Daybreak Express are separate from the indictments by the US Department of Justice. They were filed on Jun 2 and Jun 9, respectively.
Both suits were filed against Singamas, China International Marine Containers, CXIC Group Containers and a group of executives, including Mr Teo, who is the CEO and chairman of Singamas. The firms are seeking monetary damages.
CA Spalding, which supplies components to aerospace, automotive and other industries, said the alleged scheme forced it to overpay for the cost of shipping goods by container.
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In its suit, the company said that it is seeking “multiple or treble damages” in monetary relief.
The US Justice Department indictment accused the defendant companies, which together manufacture about 95 per cent of the world’s standard dry shipping containers, of orchestrating a price-fixing conspiracy.
In the US, it is common for civil lawsuits to follow criminal antitrust prosecutions.
Federal prosecutors said the container manufacturers’ customers included “major US-based container lessors, shipping lines, and logistics companies” and that the defendants’ price-fixing caused delays and higher prices for American consumers.
Standard dry shipping containers, which are unrefrigerated, annually carry billions of dollars of products across the oceans to households in the United States.
The federal indictment said that the accused companies raised the price of dry shipping containers by restricting their output by various means, including by limiting the hours each production line for the containers could run per day, installing video surveillance cameras and agreeing not to build any new container manufacturing factories.
As a result, the price of standard shipping containers roughly doubled between 2019 and 2021, increasing the container manufacturers’ profits by approximately one hundredfold, the Justice Department said.
The alleged conspiracy went on for over four years, from November 2019 to at least January 2024.
US court documents showed that after a December 2019 meeting between the alleged conspirators, a Singamas executive reported to Mr Teo that during the meeting, he had reminded the others “not to be high profile since it might violate the monopoly law or being accused of price manipulation by our customers”.
Mr Teo had purportedly written in response to the executive’s report on the meeting that “we also need to keep low key”.
Since being named by the Justice Department in late May, Mr Teo has taken a leave of absence from his roles at the Singapore Business Federation (SBF) and the Singapore Economic Resilience Taskforce, as well as from the National University of Singapore and the shipping firm Pacific International Lines.
In a statement, Mr Teo said then that he does not intend to seek re-election as SBF chairman when his term ends on Jun 24.
“I have proactively decided to take these leaves of absence to afford myself sufficient time to attend to this matter, and for the best interests of the aforementioned organisations,” he said in a separate statement.
Source: CNA/Reuters/nh(rj)
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