BBQ seeks to sue BHC for forgery, defamation

BBQ Chairman Yoon Hong-geun gives a speech during the company's 25th anniversary at one of his company's buildings in Seoul on Sept. 1. / Courtesy of BBQ

By Kim Jae-heun

Korean fried chicken franchise BBQ is taking legal action against BHC for defamation of its Chairman Yoon Hong-geun, after a recent report revealed that its local rival forged evidence in an embezzlement scandal two years ago that allegedly involved him.

Police searched BBQ headquarters and the homes of company executives in November 2018 after a former employee surnamed Joo accused Yoon of embezzling 10 billion won in company funds to pay his children's tuition fees for the previous eight years.

Police forwarded the case to the prosecution requesting an indictment but the prosecutors dropped the case citing a lack of evidence.

Two years later, Joo a former employee of BBQ, contacted the Hankook Ilbo, a sister paper of The Korea Times, claiming BHC was actually behind the scandal and its CEO Park Hyun-jong paid him and had introduced him to a reporter at the paper to tarnish BBQ's reputation.

BHC instantly sent out a press release denying Joo's stated claims and stating it would take legal action against Joo and the Hankook Ilbo for defamation.

“Joo contacted and consulted with us first, but he reached out to the press and judicial agencies on his own. We were not involved,” BHC said in a press release. However, it acknowledged that an official from its public relations department had introduced Joo to a journalist.

In an interview with the Hankook Ilbo, Joo said the BHC CEO had paid him and told him to reveal the embezzlement allegations against Hong.

Park also allegedly handed over personal information of executives at BBQ so Joo could give it to police while providing a statement.

BHC denied all the accusations.

BHC was a subsidiary of BBQ until 2013 when it was spun off as an independent franchise brand. Park and Joo knew each other from those days.

However, BHC has been involved in various legal battles with BBQ over the theft of business secrets and breaches of contract.

Ultimately, the embezzlement scandal did not lead to the indictment of the BBQ chairman but it did deal lasting damage to the fried chicken brand, with many customers turning their back on the company leading to a sharp decrease in sales.

BBQ is taking a cautious attitude towards the new allegation, although it said it would take legal action against BHC if the Hankook Ilbo's report is true.

“We will have to cross-check if BHC was really involved in the 2018 scandal. If it turns out to be true, we will sue BHC for obstruction of business and defamation of Chairman Hong,” a BBQ official said.