Ajinomoto pleads guilty in ADM case Firms conspired to fix price of lysine


CHICAGO -- Ajinomoto Co. Inc., facing possible indictments and a lengthy trial, pleaded guilty to federal charges it conspired with Archer Daniels Midland Co. to fix the price of lysine, a protein used in animal feed.

Judge Ruben Castillo, in U.S. District Court in Chicago, refused Ajinomoto's no-contest plea last month after federal prosecutors told him the company destroyed records when it learned about the U.S. government investigation.

Attorneys for Tokyo-based Ajinomoto argued last month that the company had cooperated early with the investigation and should be allowed to plead no contest. Scott Lassar, first assistant U.S. attorney, said Ajinomoto offered the judge no further comment after changing its plea yesterday.

Prosecutors said they expected Ajinomoto would have been indicted if the company had pleaded not guilty yesterday.

Castillo will determine a sentence after all litigation relating to the price fixing is resolved. The company could be fined as much as $10 million.

In August, Ajinomoto, Tokyo-based Kyowa Hakko Kogyo Co. and the U.S. subsidiary of a Korean firm, Sewon America Inc., agreed to settle charges that they colluded with U.S. grain giant Archer Daniels Midland to set prices in the $600 million-a-year lysine market.

The three agreed to cooperate with the U.S. Justice Department's investigation into the price-fixing and the role of Decatur, Ill.-based ADM.

ADM ended the four-year federal probe Oct. 15 by pleading guilty to two felony counts that it colluded with rivals to fix prices and sales levels globally for lysine and citric acid, and the company agreed to pay a record $100 million fine.

Lysine, an amino acid, is used to foster growth in swine and poultry.

Kyowa Hakko Kogyo and Sewon America entered guilty pleas three days after Archer Daniels Midland. Kyowa is subject to a $10 million fine and probation, and Sewon is subject to a lesser fine because of its reduced role in the scheme.

The top executives in the three Asian companies also have agreed to plead guilty and pay fines ranging from $50,000 to $75,000. They are scheduled to appear before Castillo on Jan. 14.

bTC Prosecutors have told two top ADM executives they face criminal indictments in the lysine case. They are ADM Vice President Michael Andreas, the son of ADM Chairman Dwayne Andreas, and Terrence Wilson, head of the company's corn-processing division.

Dwayne Andreas apologized to ADM shareholders at the company's annual meeting Oct. 17. Later the same day, he announced that Michael Andreas had taken a leave of absence from the company and that Wilson was retiring, citing medical reasons.

Pub Date: 11/15/96

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