Grabar Law Office has filed an action pursuant to 8 DEL. C. § 220 to enforce Plaintiff’s statutory right to inspect certain books and records of Defendant Micron Technology, Inc.
As alleged in the Complaint, prices for DRAM chips had been steadily declining for approximately three decades. However, in 2017, they increased approximately 47% with a significant decrease in the expected rate of volume growth of DRAM chips.
On December 26, 2017, Reuters published an article entitled “China regulator flags greater scrutiny on chips after price surge.” the article stated “China’s economic regulator is paying close attention to a recent surge in the price of mobile phone storage chips and could look into possible price fixing by the firms that make them,” which included Micron. The Company’s 2018 10-K disclosed, exactly five month after the fact, “[o]n May 15, 2018, the Chinese State Administration for Market Regulation Market Regulation (‘SAMR’) notified Micron that it was investigating potential collusion among DRAM suppliers in China.”
The Company did not officially disclose the inspection, or raid on its offices until the 2018 10-K, which said “[o]n May 31, 2018, SAMR made unannounced visits to our sales offices in Beijing, Shanghai, and Shenzhen to seek certain information as part of its investigation. We are cooperating with SAMR in its investigation.”
The Company was aware no later than May 15, 2018, it was being investigated by SAMR for potential DRAM price-fixing in China but failed to inform investors of this material fact until October 15, 2018, precisely five months later.
On November 19, 2018, the Financial Times published an article reporting SAMR had “found ‘massive evidence’ of anti-competitive behaviour” by Micron and that Micron had engaged in a price fixing conspiracy with Samsung and Hynix. The Financial Times article cited Kim Young-woo, an analyst at SK Securities, as saying China could impose fines of more than $2.5 billion on Micron “in the worst-case scenario” if the Company is found to have fixed prices.
The Company is subject to numerous antitrust class action complaints in the United States alleging it conspired with Samsung and Hynix from at least June 1, 2016 to February 1, 2018 to inflate artificially prices of DRAM sold to direct and indirect purchasers in this country. It is further alleged that the Company issued numerous materially false and misleading statements about competition at the same time it was being investigated for anti-competitive activities. Micron is now facing potential enormous liability from both the Chinese government’s investigation and the pending multiple antitrust and securities fraud actions.
A public version of the Complaint can be viewed here: Micron Filed 220-complaint
A news article about the Complaint can be viewed here: Micron Investor Sues For Corporate Docs Over Price-Fixing – Law360
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