MPK chairman Jung Woo-hyun makes a deep bow at a news conference in the building of his group.[Photo by Namgung Jin-ung= timeid@ajunews.com]
The founder of South Korea's major pizza chain, Mr. Pizza Korea (MPK) Group, apologized and resigned as group chairman to face an investigation by state prosecutors into alleged illegal business activities.
MPK Group chairman Jung Woo-hyun, 69, became the first business chief to go since South Korea's new President Moon Jae-in took office on May 9 with a pledge to eradicate unfair business practices and stop big companies or family-run conglomerates known as chaebol from abusing their dominant power.
MPK, founded in 1990, is a restaurant group based on a handmade muffin and coffee franchise, Italian buffet restaurants, and a premium pizza chain with hundreds of outlets at home and abroad. The group has expanded its presence in Asia. In March, it opened its second pizza outlet in Bangkok, capitalizing on growing popularity of Hallyu (Korean cultural wave).
Prosecutors launched a raid into the pizza group last Wednesday and banned Jung from traveling abroad pending an investigation into alleged irregularities. He is suspected of providing expensive cheese to franchise partners through firms controlled by relatives, forcing them to bear the burden of advertising expenses, and creating a slush fund.
"I sincerely apologize for disappointing the people with my wrongdoing," Jung said in a statement, vowing to form an independent committee involving experts, franchise partners and consumers who will work out a reform roadmap to introduce transparent management and reliable corporate governance.
He vowed to ensure fairness in providing raw materials to MPK outlets with his relatives excluded.
Acting as Moon's advance guard for reforming chaebol, Fair Trade Commission (FTC) Chairman Kim Sang-jo, an outspoken economics professor, has urged chaebol to enhance corporate governance, protect the interests of minority shareholders, and reduce their dominant role in South Korea's economy.
Jung stressed that his resignation should not damage the group's normal business activities. His resignation comes amid growing public antagonism to chaebol. A corruption scandal involving ex-president Park Geun-hye and her aides has fanned public anger at collusive ties between businessmen and politicians.
Lim Chang-won = cwlim34@ajunews.com
reporter
Park Sae-jin
swatchsjp@ajunews.com
