Hanwha chairman gets jail term
Source: Agencies |
August 17, 2012, Friday
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THE chairman of Hanwha Corp, one of South Korea's largest conglomerates, was sentenced to four years in prison and fined 5.1 billion won (US$4.5 million) for embezzlement in a ruling that shows a tougher stance against wrongdoing by leaders of the country's mightiest companies.
Kim Seung-youn used his influence over Hanwha affiliates to aid his brother's near-bankrupt companies, which caused over 288 billion won in losses at the Hanwha-controlled businesses, Seoul Western District Court said in a statement yesterday. Hanwha is South Korea's 10th-largest chaebol as the country's industrial conglomerates are known.
The court also found Kim guilty of forcing Hanwha's affiliates to sell shares in an oil company to his sister at below-market prices to help his sister's attempt to acquire the company. He also dodged taxes by trading shares under his employees' names.
According to documents that authorities confiscated from Hanwha headquarters, employees were instructed to regard Kim as a god-like figure and "an object of absolute obedience." The company's authoritarian culture allowed Kim to steal corporate funds, the court said. It was not his first scrape with the law. He was pardoned in 2008 after a conviction for beating a worker.
Following yesterday's ruling, Kim was taken into custody to start serving his prison sentence, a surprising development in South Korea where chaebol bosses are national icons and often regarded as beyond the reach of the law.
A Hanwha spokesman said by phone that Kim and a dozen other Hanwha employees who were found guilty will appeal the court's ruling.
"The chief of South Korea's top 10 business being immediately jailed after the first ruling, that is an important sign that shows a change in South Korean society," said Kim Sang-jo, a professor of economics at Hansung University.
According to Chaebul.com, a website on South Korea's leading conglomerates, courts gave suspended sentences to the seven executives from the top 10 chaebol who were convicted of crimes since 1990. Presidential pardons have often followed convictions of chaebol bosses.
The lenient punishments and presidential pardons given to prominent business figures stem from a perception that took root in the 1960s that their absence from society could undermine the economy. Family-owned industrial groups helped develop South Korea from the ruins of its 1950-1953 war with North Korea into Asia's fourth-largest economy and one of the wealthiest.
Kim Seung-youn used his influence over Hanwha affiliates to aid his brother's near-bankrupt companies, which caused over 288 billion won in losses at the Hanwha-controlled businesses, Seoul Western District Court said in a statement yesterday. Hanwha is South Korea's 10th-largest chaebol as the country's industrial conglomerates are known.
The court also found Kim guilty of forcing Hanwha's affiliates to sell shares in an oil company to his sister at below-market prices to help his sister's attempt to acquire the company. He also dodged taxes by trading shares under his employees' names.
According to documents that authorities confiscated from Hanwha headquarters, employees were instructed to regard Kim as a god-like figure and "an object of absolute obedience." The company's authoritarian culture allowed Kim to steal corporate funds, the court said. It was not his first scrape with the law. He was pardoned in 2008 after a conviction for beating a worker.
Following yesterday's ruling, Kim was taken into custody to start serving his prison sentence, a surprising development in South Korea where chaebol bosses are national icons and often regarded as beyond the reach of the law.
A Hanwha spokesman said by phone that Kim and a dozen other Hanwha employees who were found guilty will appeal the court's ruling.
"The chief of South Korea's top 10 business being immediately jailed after the first ruling, that is an important sign that shows a change in South Korean society," said Kim Sang-jo, a professor of economics at Hansung University.
According to Chaebul.com, a website on South Korea's leading conglomerates, courts gave suspended sentences to the seven executives from the top 10 chaebol who were convicted of crimes since 1990. Presidential pardons have often followed convictions of chaebol bosses.
The lenient punishments and presidential pardons given to prominent business figures stem from a perception that took root in the 1960s that their absence from society could undermine the economy. Family-owned industrial groups helped develop South Korea from the ruins of its 1950-1953 war with North Korea into Asia's fourth-largest economy and one of the wealthiest.
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