Hyosung group chairman indicted for alleged business irregularities

[Yonhap Photo]

SEOUL, Jan. 23 (Aju News) -- South Korean prosecutors indicted Hyosung Group chairman Cho Hyun-joon Tuesday over alleged business irregularities, a year after he took the helm of the conglomerate from his ailing father.

Cho, 50, was not detained but he will stand trial on charges of embezzling company money worth about 20 billion won (18.8 million US dollars) and breach of trust, according to the prosecutor's office in Seoul.

The chairman allegedly forced his private company to bear financial losses worth 17.9 billion won for the purchase of paid-up capital and treasury stock in 2013. He was accused of realizing an illegal profit worth 1.2 billion won from the sale of artworks to a group art fund, and of putting women on the company payroll even though they were never actually employed.

However, Cho was cleared of creating slush funds. The investigation was based on complaints filed by his brother in 2014 that the chairman has been involved in various irregularities.

The group's business scope covers textiles, chemicals, trading to heavy industries and construction. Hyosung is the world's largest producer of spandex, a synthetic fiber known for its exceptional elasticity, and about 40 percent of its profits come from the textile business.

Hyun-joon, the eldest son of group patriarch Cho Seok-Rae, took over as chairman in December 2016 when his father stepped down for health reasons, ending a protracted feud with his brother, Cho Hyun-moon, over the succession of group leadership.

The group has been the target of criticism by civic groups. Hyun-joon was given a suspended prison sentence on conviction of embezzlement in 2010 and received a pardon later. He received a suspended sentence again in 2016 for tax evasion and accounting fraud. He appealed the conviction, and a final decision is still pending.

Lim Chang-won cwlim34@ajunews.com

Hyosung group chairman indicted for alleged business irregularities

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