Prosecutors to question Hyosung Group chief for suspected slush fund

Cho Hyun-joon, chairman of South Korea’s industrial conglomerate Hyosung Group, has been summoned for prosecutorial questioning on multiple corruption and embezzlement charges

The Seoul Central District Prosecutors’ Office said on Monday that it asked Cho to report to its office by 9:30 a.m. Wednesday to respond to questions about violation of trust based on the country’s special criminal law on specific crimes.

Cho is suspected of having stacked away more than 10 billion won ($9.4 million) in slush funds through a paper company owned by his close aide surnamed Hong that got involved in construction projects led by Hyosung Group from 2010 to 2015. A senior executive at Hyosung Group surnamed Park has already been arrested last month for his alleged involvement in favoring the paper company in business deals.

Prosecutors are also looking into suspicions that Cho allowed Hyosung Group provide illegal funds worth tens of billions of won to Galaxia Photonics Co., a troubled subsidiary under the conglomerate in which Cho is a stakeholder. The chairman is accused of embezzlement by creating a 30 billion won art fund that allegedly profiteered by purchasing artworks at a high rate and transporting the losses to Hyosung.

Prosecutors are also looking into suspicions that Cho created overseas slush funds by having conglomerate subsidiaries including Nautilus Hyosung provide billions of won to a paper company in Hong Kong over several years from mid-2000 under the pretext of providing consulting services.

Hyosung Group has been embroiled in alleged corruption activities since Cho Hyun-moon, former vice president of the textile giant, raised dozens of accusations involving his older brother in a family feud since July, 2014.

[ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved]