By Lee Hyo-sik
A court refused to issue an arrest warrant for Himart CEO Seon Jong-koo, damaging the prosecution’s investigation of allegations that the chief of the nation’s largest electronics retailer embezzled corporate money and dodged taxes.
The Seoul Central District Court said there wasn’t enough evidence to charge Seon and that there is no risk of him fleeing or destroying evidence.
“Evidence was insufficient to support charges involving some allegations,” Judge Park Byeong-sam said after the review of the validity of the warrant.
As a result, the prosecution said it will seek an arrest warrant for Seon again. Prosecutors had asked the court to issue the initial warrant for him on charges of breach of trust and embezzlement on March 23.
``It is absolutely necessary to obtain an arrest warrant because he caused significant damage to Himart and its shareholders. We will secure more incriminating evidence against Seon and seek the warrant again,’’ a prosecutor said.
In the meantime, the prosecution is looking into allegations that Himart was founded and owned by Kim Woo-choong, the founder and former chairman of now-defunct Daewoo Group.
The Supreme Public Prosecutors’ Office reportedly summoned Chung Joo-ho, former president of Daewoo Motor, on March 10 to question him about whether Himart was set up by Kim and affiliates of Daewoo Group, which disguised themselves as independent entities from one of Korea’s once largest conglomerates.
Daewoo collapsed under snowballing debt following the 1997-98 Asian financial crisis and many of its subsidiaries were sold to Korean and non-Korean firms.
``We secured testimonies from Chung that 78,000 Himart shares sold by CEO Seon Jong-koo in 2000 were owned by Daewoo Chairman Kim,’’ a prosecution official was quoted as saying by a local daily. ``If we confirm Himart was founded by Kim under borrowed names, we will treat the electronics distributor as Kim’s assets and consider confiscation.’’
Over the past few months, the prosecution has been investigating Seon over allegations that he dodged taxes and illegally moved assets abroad. He is suspected of having transferred company funds and personal savings amounting to 100 billion won ($89 million) to a paper company he set up in a tax haven in Europe.
In addition, the chairman bought a house valued at $2 million in Beverly Hills, California, in 2008 under the name of his son, Seon Hyun-seok, CEO of HM Tour, according to the prosecution.
Himart CEO allegedly embezzled 3 billion won in company funds and gave it to Chung in 2004. In 2002, Chung filed a lawsuit against Seon, accusing him of unilaterally disposing of 79,000 Himart shares. As a court settlement, Seon offered Chung the money.