The alleged price-fixing of nearly all of the world’s standard dry (unrefrigerated) containers continued for more than four years, from as early as November 2019 until at least January 2024, the U.S. Justice Department said in a recent press release.
The department said that four of the world’s largest shipping container manufacturing companies were involved in the scheme.
“The multi-year conspiracy roughly doubled the prices of standard shipping containers between 2019 and 2021, increasing the container manufacturers’ profits approximately one hundredfold during the Covid-19 pandemic and global supply chain crisis,” it said.
Teo is the chief executive and chairman of Singamas Container Holdings, a Hong Kong-listed company. Singamas is a listed subsidiary of Pacific International Lines, where Teo serves as executive chairman.
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Teo Siong Seng, chairman of Singamas Container Holdings. Photo via Instagram/ips_sg |
Teo is also chairman of the Singapore Business Federation. In that role, he is part of the Singapore Economic Resilience Taskforce, as reported by Channel News Asia.
He is one of six executive co-defendants linked to Singamas marketing director Vick Nam Hing Ma, who was arrested in France on April 14. Ma’s extradition to the U.S. is pending.
Following Ma’s arrest, the executives and the companies they worked for were charged with conspiring to restrict the output of, and fix the prices of, nearly all of the world’s dry containers.
“The intermodal containers … carry billions of dollars of goods across the oceans to American households each year,” said the Justice Department. Teo and five other co-defendants remain at large.
In a filing to the Hong Kong exchange on Wednesday, Singamas said neither the company nor Teo had been served with “any legal process or other legal documentation” by the U.S. Justice Department.
The company added that it had appointed external legal advisers. It said all business operations and day-to-day activities would continue as normal in the meantime.
Singamas also requested a one-day trading halt from Wednesday afternoon until 9 a.m. on Thursday. Shares of Singamas closed Thursday 13.6% lower, according to The Business Times.
Price gouging agreement
The Justice Department alleged that on or around Nov. 14, 2019, several shipping executives from China International Marine Containers (CIMC), Shanghai Universal Logistics Equipment, CXIC Group Containers and an unnamed company met at CIMC’s headquarters in Shenzhen.
They allegedly agreed to raise prices of dry shipping containers by restricting the four companies’ output through various means. These included limiting how long production lines for the containers could operate each day, installing video surveillance cameras to ensure companies did not exceed the agreed limits, refraining from building new container manufacturing factories and setting up a fund with a mechanism to financially penalize any party that reneged on the agreement.
Singamas and another unnamed company later joined the output-restriction agreement.
CIMC’s manufacturing business segment profits rose nearly one hundredfold, from about US$19.8 million in 2019 to about $288 million in 2020 and $1.75 billion in 2021.
Singamas’ net income improved from a loss of about $110 million in 2019 to profits of about $4.6 million in 2020 and about $186.8 million in 2021.
“The defendants held hostage the world’s supply of ocean shipping containers during the Covid-19 pandemic when our supply chains needed it the most. They stole from everyday Americans who paid more and waited longer for vital goods as a result,” said acting assistant attorney general Omeed A Assefi of the Justice Department’s antitrust division.
