March's 'Corona Boritgogae' Hits Struggling Business, April Sees Successive Chairman Trials Triggering Another Emergency

From the left, Lee Joong-geun, Chairman of Booyoung Group; Cho Hyun-bum, CEO of Hankook Tire & Technology; Cho Hyun-joon, Chairman of Hyosung Group; Lee Jae-yong, Vice Chairman of Samsung Electronics / Yonhap News

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[Asia Economy Reporter Kim Hyung-min] Several trials involving corporate heads have been held one after another since April, putting the business community on alert.

In addition to the economic downturn caused by the spread of the novel coronavirus infection (COVID-19), the added 'judicial risk' has led business insiders to say that "April is a critical moment."

As early as this month, Lee Joong-geun, chairman of Booyoung Group, will receive the Supreme Court's final verdict. Chairman Lee was sentenced to 2 years and 6 months in prison and fined 10 million won in the second trial on charges of embezzlement and breach of trust involving hundreds of millions of won. On the 2nd, Chairman Lee's side submitted a request for suspension of detention execution to the Supreme Court and is awaiting the result. Due to his old age and health reasons, he is requesting the suspension of the detention decision as it is difficult for him to live in a detention center.

The retrial of Samsung Electronics Vice Chairman Lee Jae-yong will decide this month whether to change the presiding judge. On the 24th of last month, the special prosecutor team led by Park Young-soo filed a 'disqualification request' asking to change the presiding judge, claiming that the Criminal Division 1 of the Seoul High Court (Chief Judge Jung Joon-young) was biased. Accordingly, the trial has been indefinitely postponed.

The trial of Cho Hyun-joon, chairman of Hyosung Group, and Cho Hyun-beom, CEO of Hankook Tire & Technology, was held on the 8th. At the appellate trial, Chairman Cho's side claimed innocence, saying "there is a logical contradiction in the first trial's judgment."

Chairman Cho was originally scheduled to be tried on the 25th but postponed the date due to self-quarantine after an overseas business trip. He is accused of causing a loss of 17.9 billion won by having his personal company 'Galaxia Electronics (GE)', where he is the major shareholder, conduct a capital reduction and repurchase treasury stocks to raise funds for stock repurchase in 2013 (embezzlement and breach of trust). The first trial sentenced Chairman Cho to 2 years in prison.

Cho Hyun-beom, CEO of Hankook Tire & Technology, who was indicted on charges of receiving several hundred million won in bribes from subcontractors, was sentenced to 4 years in prison by the prosecution at the sentencing hearing held on the same day.

In his final statement, CEO Cho said, "I feel devastated and remorseful. I fully accept all responsibility, acknowledge my guilt, and apologize." He is accused of receiving several million won monthly, totaling over 600 million won, as delivery fees from subcontractors and regularly embezzling about 200 million won from affiliate funds. He was released on bail after the bail request was granted on the 23rd of last month.

On the 7th, the first hearing of the divorce lawsuit between SK Group Chairman Chey Tae-won and No So-young, director of Art Center Nabi, took place. Chairman Chey did not appear in court. On the same day, Lee Myung-hee, former director of the Ilwoo Foundation and wife of the late Cho Yang-ho, chairman of Hanjin Group, who was indicted on charges of habitual verbal and physical abuse against drivers and others, was sentenced to 2 years in prison by the prosecution at the sentencing hearing held at the Seoul Central District Court.

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