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SK Group head gets four-year jail sentence


04:16 PM January 31st, 2013

January 31st, 2013 04:16 PM

SEOUL – The head of South Korea’s third largest conglomerate, the SK Group, was sentenced to four years in prison Thursday after being convicted of embezzling close to $50 million.

The custodial sentence was seen as relatively tough in a country where convicted business tycoons are often given suspended prison terms in recognition of their apparent contribution to the national economy.

The court ruled that Chey Tae-Won, 53, had embezzled 49.7 billion won ($45.6 million) from two affiliates and funnelled the money into a firm for investments in stock futures and options in 2008.

The SK Group boss had remained free since he was indicted a year ago.

The energy-to-telecom conglomerate, which includes top mobile carrier SK Telecom, said Chey would appeal the verdict.

It was not Chey’s first conviction.

In 2003 he was sentenced to three years in prison for his role in a $1.3 billion accounting fraud. He was released after just seven months and, in 2008, was finally granted a full presidential pardon, wiping his record clean.

It is not unusual for senior executives with convictions for crimes including tax evasion and embezzlement to remain in charge of South Korea’s family-dominated conglomerates.

The Seoul Central District Court said in its statement that Chey had betrayed the public trust in his group.

“He should be reproached for using subsidiaries as a tool for his crime,” it said.

Chey’s younger brother and group vice chairman Chey Jae-Won was acquitted on charges that he was a knowing accomplice to the embezzlement.

South Korea has a long history of pardoning powerful tycoons.

Hyundai Motor head Chung Mong-Koo, who had been convicted of embezzlement and other charges, was pardoned in 2008, and Samsung Electronics chairman Lee Kun-Hee — convicted of tax evasion — was pardoned in 2009.

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