Time of Ordeal: Troubled Conglomerate Heads Step Down from Posts | BusinessKorea

Tuesday, September 01, 2015

Chey Tae-won, former head of the SK Group (left); and Lee Jay-hyun, former former chairman of the CJ Group.
Chey Tae-won, former head of the SK Group (left); and Lee Jay-hyun, former former chairman of the CJ Group.
5 March 2014 - 3:38pm

SEOUL, March 4 (Yonhap) – The heads of SK Group and CJ Group both stepped down from their major positions in affiliates, industry sources said Tuesday, in response to the courts’ ruling, which found them guilty of corruption.

South Korea’s No. 3 conglomerate SK Group said that its head, Chey Tae-won, resigned from his position as inside director at key affiliates, namely SK Holdings Co., SK Innovation Co., SK Hynix Inc., and SK C&C as of Tuesday.

Following the decision, Chey will no longer have any official position at SK, while still retaining his title as the top shareholder.

Chey’s decision came as the nation’s top court last week upheld a four-year jail sentence against him for embezzling company funds.

Chey was convicted of embezzling 46.5 billion won (US$43.6 million) from two SK Group affiliates, including top mobile carrier SK Telecom Co., and funneling the funds into personal investments in stock futures and options in 2008.

The Supreme Court rejected the 53-year-old tycoon’s final appeal against a verdict handed down by two lower courts, saying that he had acted out of personal greed.

South Korea’s entertainment conglomerate CJ Group also said Tuesday that its Chairman Lee Jay-hyun will not extend his position as inside director at three of the affiliates, namely CJ E&M Co., CJ CGV Co., and CJ O Shopping Co.

The move came as the Seoul Central District Court last month sentenced the 54-year-old tycoon to four years in prison for misappropriating some 160 billion won (US$149 million) in company assets to offshore slush funds and dodging taxes in the process.

Lee, however, will maintain his spot as inside director at four other businesses, such as CJ Corp., CJ Cheiljedang Corp., CJ Korea Express Corp., and CJ GLS.

A handful of South Korean business tycoons have been undergoing corruption trials amid rising social awareness of irregularities in a country where conglomerates dominate the economy.

Last month, Hanwha Group Chairman Kim Seung-youn also stepped down from all positions at the business group.

In a retrial held four months after the nation’s top court sent the case back, the Seoul High Court last month sentenced the 62-year-old disgraced tycoon to three years in prison with a five-year stay of execution.

Kim was found guilty of using company money to pay back debts of other firms he was running under borrowed names, causing hundreds of billions of won in losses to Hanwha Group, South Korea’s 10th-largest family-controlled conglomerate.

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