A South Korean court jailed the head of the Hanwha Group conglomerate, one of the country’s largest, for four years on Thursday and sent him directly to jail, an unusual move in a country where top business leaders rarely serve jail time.
The sentencing of Chair Kim Seung-youn, who was also handed a 5.1 billion Korean won ($4.51 million) fine on charges of breach of trust, sent the shares of Hanwha Corp (000880.KS) skidding nearly 5 percent.
The Seoul Western District Court ruled that the 60-year-old Kim used Hanwha group affiliates’ funds to “unfairly support” companies owned by him.
“(As) a controlling shareholder of Hanwha Group, the defendant is passing on his responsibility to working-level officials and he has not shown remorse. Considering this, he needs to be strictly punished,” Judge Seo Kyung-hwan said in his ruling.
Hanwha executive Kang Ki-soo told reporters after the ruling that it would immediately appeal against the ruling.
Hanwha is the tenth biggest of South Korea’s business groups by assets with interests from explosives and construction to chemicals and solar energy.
The ruling comes at a sensitive time, ahead of December’s presidential elections and amid calls to get tougher on South Korea’s “chaebol”, or huge diversified business conglomerates.
This is not the first time Kim has been jailed. He was sentenced in 2007 to an 18 month prison term for beating karaoke bar workers he believed had assaulted his son.
An appeals court later ruled that his jail term was too heavy and suspended it for three years.