Chey Tae-won, Chairman of SK Group, Korea’s third largest business conglomerate, was convicted yesterday of embezzling $45.6M from company coffers. He has already started his four year prison term.
In the past top Korean business men have used their position to escape jail, but in the recent presidential election ‘democratizing business’ in Korea was a major talking point, by both front-runners, amid a growing wave of discontent among the public that top business tycoons have been getting off lightly, despite clear cases of corruption.
The most recent (fair) punishment is a clear message from the new President Elect’s office that white collar crimes will now be subject to stiff penalties. SK Group said Chey would appeal.
Korean business conglomerates hold an enormous amount of power and it is encouraging to see that despite this they are no longer above the law. This is being seen as a step in the right direction towards leveling the skewed playing field in Korea.
More about the Case:
Chey and his younger brother were indicted in January 2012 after prosecutors investigated allegations of massive misappropriations of SK money. The younger brother has been released, as it was ruled he merely followed orders.
“Chairman Chey deserves strong criticism because he used his affiliates as vehicles for his crime,” Judge Lee Won-bum said. Lee went on to criticize the Chairman’s actions on the grounds that public trust in one of Korea’s flagship corporations has been seriously damaged and stated that he felt compelled “to show stern punishment instead of leniency.”
Chey was accused of embezzling the money from a $257M investment fund set aside by 18 SK affiliates. It is suspected the money was used to make futures investments.
That practice of offering top business personalities suspended sentences, instead of jail time was broken last year when Hanwha Group Chairman Kim Seung-youn was jailed. Kim was ordered to serve four years and pay a massive fine for breach of trust.
SK Chairman Chey dodged the bullet once before when he was convicted of insider trading and accounting fraud in 2008. At the time, he received a three-year suspended prison term with a five-year probation.