Major pizza chain founder arrested for illegal business activities

By 임장원 Posted : July 7, 2017, 08:51 Updated : July 7, 2017, 17:37

[Photo by Yoo Dae-gil = dbeorlf123@ajunews.com]



The founder of South Korea's major pizza chain, Mr. Pizza Korea (MPK) Group, was arrested, becoming the first group head to be punished since President Moon Jae-in, a liberal leader, took office in May with a pledge to eradicate unfair business practices.

A court in Seoul approved a request from state prosecutors on Thursday night to arrest Jung Woo-hyun, 69, on charges of embezzlement, obstruction of duty, and unfair business activities. He resigned as group chairman last month, insisting his departure should not damage the group's normal business activities. He has denied any wrongdoing.

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 argued Jung's group provided expensive cheese to franchise partners through firms controlled by relatives, paid salaries to his relatives with no actual work, and raked in unfair profits. A pizza outlet operator in Incheon west of Seoul committed suicide in March, claiming he was the victim of retaliation by MPK for severing a contract.

Moon has promised to stop big companies or family-run conglomerates known as chaebol from abusing their dominant power.

Lim Chang-won = cwlim34@ajunews.com

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