Corporate Owners Hit by Corruption Scandal
By Kim Tong-hyung
Staff Reporter
Prosecutors are seeking the arrest of Kim Young-jib, chief executive of mobile solutions firm Codinus, on charges of embezzling corporate funds and insider trading.
The scandal could also affect Cho Hyun-bum, Hankook Tire vice president and son-in-law of President Lee Myung-bak, who investigators plan to question over suspicions surrounding his investment in Codinus, and Kim’s former company, Next Dream (ND) Corp.
The alleged business irregularities recently exposed by the Seoul Central Prosecutors’ Office are the latest corruption case involving the sons and grandsons of the founders of ``chaebol,’’ or family-owned conglomerates.
According to investigators, Kim, the 35-year-old grandson of Hankook Chinaware founder Kim Jong-ho, is suspected of embezzling around 36.2 billion won (about $24.7 million) through illegal transactions at Codinus and ND Corp.
In 2006, Kim had ND Corp. acquire insurance company DTA, in which he had a controlling stake, at an inflated price of 15 billion won. ND Corp. paid 750,000 won per share, despite the face value of DTA stocks being just 5,000 won at that time.
Prosecutors say Kim was also involved in a number of other illegal transactions and fake business deals that allowed him to embezzle a total of 22.7 billion won at ND Corp.
Kim is also believed to have embezzled around 13.5 billion won in corporate funds after acquiring the management rights in Codinus in October last year.
Prosecutors are also expected to summon Cho soon to question him over his investments in ND Corp. and Codinus. There are suspicions that Cho used insider information to make an equity investment in ND Corp. when Kim sold his shares in the company in April last year.
Cho also joined Kim in the stock release of Codinus in August that year, along with other next-generation tycoons like Neowiz Chairman Na Sung-kyun, grandson of Anam Group founder Kim Hyang-su, and Chang Sun-woo, son of Kukdong Oil & Chemicals Group Chairman Chang Hong-sun.
``We need more investigations into the suspicions surrounding the using of non-public information and we will be able to make an announcement by the end of next week,’’ said a prosecutor.