SK head's 4-year jail term upheld

By Kim Da-ye

The Supreme Court upheld Thursday the four-year prison term for SK Group Chairman Chey Tae-won for embezzling tens of billions won from the conglomerate’s affiliates.

His younger brother and SK Group Vice Chairman Chey Jae-won’s appeal has also been dismissed with his three-year-and-a-half year prison sentence upheld.

Chey Tae-won is the first chairman of a major Korean conglomerate to be sent to prison following a Supreme Court ruling.

The highest court’s decision on the Chey brothers is in contrast to the suspended prison term handed down earlier this month to Hanwha Group Chairman Kim Seung-youn and LIG Group Chairman Koo Cha-won at the Seoul High Court and the Seoul Central District Court, respectively.

“The ruling is significant for holding the chairman and vice chairman of SK Group responsible for using funds of the group’s affiliates for personal gain,” an official at the Supreme Court said.

The Seoul High Court sentenced the 53-year-old Chey Tae-won to four years in prison last September for embezzling 45 billion won from the group’s affiliates including SK Telecom, the country’s largest mobile carrier, and SK C&C.

Chey Tae-won invested the embezzled money and his own wealth into derivatives, but lost hundreds of billions won. He claimed that he did so because he felt bad he inherited his father’s fortune alone, and wanted to make a profit from the investment to give to his younger brother.

The high court ruled that Chey plotted the embezzlement with Kim Jun-hong, the former head of an investment company, who invested the money on his behalf. Kim was given a three-year prison term suspended for five years.

His brother Chey Jae-won had been found not guilty of embezzlement at a lower court, but the high court overturned the ruling.

The Chey brothers had requested an additional hearing at the appeals court because it ended before former SK Shipping advisor Kim Won-hong, who their lawyers wanted to call as a witness, was extradited back to Korea.

Kim, known as a “mentor” to the Chey brothers, advised them on the investment into derivatives and was convicted in January of embezzlement together with the brothers.

Kim fled to China in early 2011 just before the prosecution’s investigation began, but was arrested last September in Taiwan and extradited a day before the high court ruling.

The Supreme Court ruled that it was lawful for the high court not to accept Kim Won-hong as a witness. It also found that using the records of telephone conversations between Kim and the Chey brothers as evidence was appropriate.

Chey Tae-won has been in custody since Jan. 31, 2013. He was a rarity for a chaebol chairman as he attended the hearings regularly standing on his own two feet, and not in a wheelchair or on a gurney.