The chairman of a pharmaceutical wholesale company who provided 5 billion won in rebates to the chairman of a medical corporation has been indicted.
The Seoul Western District Prosecutor's Office Food and Drug Crime Investigation Department (acting Director General Jo Man-rae) announced on the 18th that it had indicted Mr. A (67), the representative of the pharmaceutical wholesale company, and eight others, including the chairman of a university hospital, on charges of breach of trust, bribery, and violations of the Medical Service Act and the Pharmaceutical Affairs Act without detention on the 8th.
Mr. A is accused of establishing a fictitious entity with no substance to provide rebates while supplying pharmaceuticals to three general hospitals from 2019 to 2024.
Mr. A allegedly allowed the family of the chairman of B Medical Corporation to acquire equity in the fictitious entity and provided approximately 3.4 billion won in rebates under the guise of dividends. Additionally, Mr. A is also accused of falsely registering the chairman's family as employees of the fictitious entity, paying them salaries, and allowing them to privately use corporate credit cards and corporate golf club memberships, providing an additional 1.6 billion won in rebates.
Prosecutors raided the company operated by Mr. A in January 2025. During this process, they uncovered additional facts that the family of the chairman of C University Hospital had received rebates disguised as consulting or borrowing contracts and colluded with pharmaceutical wholesalers on bidding.
As a result of the prosecution's investigation, it was revealed that Mr. D, the chairman of C University Hospital, who received hundreds of millions of won in rebates from Mr. A, also received approximately 1.25 billion won in rebates from two other suppliers of pharmaceuticals and manipulated the bidding results in return. Through this, in the bidding held last February, Mr. A's company won contracts worth 18.6 billion won, while the other two companies won contracts worth 12.8 billion won and 21.5 billion won, respectively.
A prosecutor stated, "This crime is a novel method of establishing a fictitious entity and providing rebates in the guise of dividends."