By Lee Hyo-sik
The prosecution indicted Hanwha Group Chairman Kim Seung-yeon, 59, without physical detention, Sunday, on charges of embezzling and misappropriating company funds, wrapping up its 140-day-long investigation into one of Korea’s largest family-controlled conglomerates.
Prosecutors also indicted 10 group executives and accountants suspected of helping Kim amass hundreds of billions of won illicitly and evading taxes. Kim and the 10 are alleged to have caused over 640 billion won in financial damage to the group by engaging in a range of illegal activities.
The Seoul Western District Prosecutors’ Office had initially planned to indict all 11 with custodial detention, decided against this after the court refused to issue arrest warrants for some of them, including former Hanwha Group chief financial officer and a certificated public accountant, in the early stages of the investigation.
The prosecution alleges that Kim embezzled 320 billion won from financially-sound group affiliates to pay for debts at weaker ones. The chairman is also suspected of causing about 104 billion won in damages to the group by forcing Hanwha S&C and Dongil Petroleum to sell their shares to his three sons and older sister at lower than market prices.
To evade taxes, Kim also created and managed a slush fund of over 100 billion won by opening a total of 382 “borrowed-name” bank accounts, according to the prosecution.
“Hanwha forced its employees to lie to investigators and concealed internal documents at a greenhouse on the outskirts of Seoul to obstruct the investigation. We will continue to look into the case to uncover additional crimes of those indicted and indict more individuals involved if there are any,” a prosecution official said.
He said the country’s 13th largest conglomerate suffered a total of 646.6 billion won in financial losses as a result of embezzlement, breach of trust and other wrongdoings committed by Chairman Kim and his associates.