SK owner jailed

By Na Jeong-ju

Chey Tae-won Former SK Group Chairman

Former SK Group Chairman Chey Tae-won was immediately put behind bars Thursday after receiving a four-year jail sentence for embezzlement.

This is the second time Chey has been imprisoned in about 10 years ― he was jailed in 2003 for masterminding a large-scale accounting fraud, but was later granted a presidential pardon.

The 52-year-old tycoon, now chairman of SK Holdings, was indicted again in January on charges of embezzlement and breach of trust.

The prosecution claimed he colluded with his younger brother Chey Jae-won, a vice chairman of SK Group, to embezzle 49.7 billion won ($44.5 million) of company funds in 2008. The money was part of 280 billion won from 18 SK affiliates, which had been set aside for investment in a financial unit, Benex Investment.

Chey was also charged with creating a slush fund of some 13.9 billion won between 2005 and 2010.

The Seoul Central District Court convicted the chairman of embezzling company funds, but found him not-guilty on the slush fund charge.

“Chey deserves stern punishment because he misused his status in SK for his own interests,” Judge Lee Won-beom said. “He disappointed a great many people and inflicted damage on his own firm.”

Chey’s lawyer said he will appeal. “We made every effort to prove Chey’s innocence, but the court ruled against him. It’s disappointing,” he told reporters.

The prosecution demanded a four-year prison term for Chey and a five-year term for his brother. The judge, however, acquitted the younger brother of all charges.

The jail sentence on Chey reflects the court’s toughened stance on crimes committed by chaebol owners.

In August last year, Hanwha Chairman Kim Seung-youn was also sentenced to four years in prison and fined 5.1 billion won by a district court for misusing company funds worth some 320 billion won. Kim was also imprisoned following the ruling.

In the past, the court had given suspended jail terms to business tycoons involved in corporate crimes, drawing public criticism that it was too lenient with them.

Previously in 2008, Chey was handed down a suspended three-year prison term for committing accounting fraud totaling 1.5 trillion won. However, he received a presidential pardon less than three months after being convicted.

Prosecutors claimed Chey misappropriated the company money to offset losses the chairman suffered from investments in stock futures and options in 2008.