Hiding in Cambodia for 8 Years... Former LG Family Scion Koo Bonhyun Repatriated and Arrested

Huge illicit gains through false disclosures and other schemes
Suspected of Capital Markets Act violations, embezzlement and breach of trust

Koo Bon-hyun, 57, a third-generation member of the former LG family, was arrested after being repatriated to South Korea. He had acquired a KOSDAQ-listed company, made huge profits from stock-price gains through false disclosures and other schemes, and spent eight years on the run overseas.

On Nov. 13, the Financial Crime Investigation Unit of the Seoul Metropolitan Police Agency’s Metropolitan Investigation Division said Koo, who is suspected of violating the Capital Markets Act and of embezzlement and breach of trust under the Act on the Aggravated Punishment of Specific Economic Crimes, was repatriated to South Korea and arrested on Nov. 9. He was then placed under arrest on Nov. 11 after a court hearing to review his arrest warrant.

According to police, from February 2016 to December 2017, Koo acquired a KOSDAQ-listed company without investing his own capital. He then used funds borrowed against his stake in the listed company to acquire promising unlisted companies, but issued false, favorable disclosures suggesting that the acquisitions had been made with his own capital.

After the stock price rose, he allegedly sold shares in the listed company that he held under borrowed names, making an estimated KRW 14 billion in illicit gains.

He is also suspected of using cash assets of an affiliate of the company he acquired for entertainment expenses and embezzling KRW 4.6 billion through fictitious consulting contracts. In addition, he allegedly caused losses of about KRW 12.3 billion by lending corporate funds without collateral and pledging corporate shares as collateral to an affiliated company without authorization.

Koo left South Korea and went into hiding overseas around October 2018, before the prosecution began its full-scale investigation. In May 2019, prosecutors obtained an arrest warrant for Koo and issued an Interpol Red Notice. After a revision to the Criminal Procedure Act, the Financial Crime Investigation Unit of the Seoul Metropolitan Police Agency took over the case from prosecutors and continued the investigation.

Police plan to question Koo about the exact amount of illicit gains he made by selling shares held under borrowed names, as well as whether he concealed assets.

Lim Jeong-wan, head of the Financial Crime Investigation Section 1 at the Seoul Metropolitan Police Agency, said, "We will continue to respond firmly to various illegal acts that disrupt order in capital market transactions," adding, "We will also handle without delay cases transferred from prosecutors under the revision to the Criminal Procedure Act."

This content was produced with the assistance of AI translation services.