The chair of SK Group, South Korea’s third-largest business group, has been charged with embezzlement after prosecutors found Chey Tae-won and his brother used more than 200 billion won ($174 million) of corporate funds for personal investments, the second corruption charge against Chey in as many years.
“It’s a typical organised crime case because the owner family of SK Group ignored interests of the group companies and used their position to secure funds for their personal investment in options,” a prosecutor at the Seoul central district prosecutors’ office said in a live broadcast on Thursday.
Prosecutors did not arrest Chey – who will be allowed to stand trial without being physically detained – and said they had promptly returned confiscated computers and other materials to the group after a raid in a bid to minimise potential negative impacts on its international profile.
The results of the investigation were announced just hours after SK Group pledged a record 19 trillion won ($16.54 billion)in investment this year on Chey’s request “to make aggressive investment plans for the sake of the national economy.”
South Korea’s family-run business conglomerates, or chaebol, such as Samsung, Hyundai and SK, have often seen family owners face legal charges. They usually receive lenient punishments, however, due to the perceived importance of the roles they play in the economy, Asia’s fourth-largest.
In 2003, Chey was found guilty of orchestrating a $1.2 billion accounting fraud at SK Networks Co Ltd, the group’s trading arm. He later received a suspended jail term.
SK’s major group companies include the country’s top mobile carrier SK Telecom and SK Innovation, which runs the country’s top crude oil refiner.
Prior to the announcement, shares of SK Innovation closed up 2.7 percent and SK Telecom fell 0.4 percent, in a wider market that ended down 0.13 percent.