Newspaper chairman resigns amid illegal fundraising scandal involving TV affiliate
The flag of MBN and Chang Dae-whan. Yonhap
By Park Si-soo
Chang Dae-whan, chairman of Maeil Media Group, announced his resignation on Tuesday, under pressure from an intensified investigation into an illegal fundraising scandal involving the group's TV affiliate.
The announcement came hours after the prosecution indicted Chang and several other senior executives on suspicion of employing illegal means to raise the legally required capital to set up the affiliate, MBN, in 2011.
“All the suspicions raised in the prosecution's investigation will be vindicated in a coming trial,” the group said. “Chang will step down as chairman to take responsibility for the brouhaha surrounding the company. He will also take his hands off management.”
The required minimum capital for the TV affiliate's establishment was 300 billion won. It managed to raise 240 billion won but failed to collect more. Prosecutors allege the company filled the shortfall of about 60 billion won with loans it got using borrowed names from employees and the group's other affiliates ― a violation of the Capital Markets Act and the External Audit Act.
To cover it up, the group “cooked the books,” prosecutors said.
Maeil neither admitted nor denied the alleged illegal fundraising.
In the statement, the company said it will “fix the capital structure at the center of the dispute as early as possible and employ an advanced accounting system to ensure transparency in corporate management.”