A two-year prison sentence was finalized for Cho Hyun-bum (54), chairman of Hankook & Company, who was brought to trial on charges of embezzlement and breach of trust. As the court recognized only part of Cho's charges, the embezzlement and breach-of-trust amount was reduced to about 2 billion won from the 20 billion won range estimated by prosecutors at indictment.
The Supreme Court's First Division (Presiding Justice Ma Yong-ju) on the 8th finalized the lower court ruling that sentenced the chairman to two years in prison on charges including embezzlement and breach of trust under the Act on the Aggravated Punishment of Specific Economic Crimes.
In March 2023, prosecutors brought the chairman to trial on embezzlement and breach-of-trust charges in the 20 billion won range. The chairman was charged with the following: ▲ providing 13.1 billion won in improper support by having Hankook Tire pay higher prices than other manufacturers while purchasing about 87.5 billion won worth of tire molds from affiliate MKT between Feb. 2014 and Dec. 2017 ▲ improper lending of 5 billion won to auto parts maker Lihan ▲ privately using chauffeurs and corporate cards ▲ receiving an apartment and vehicles as consideration for improper solicitations and providing them free of charge to acquaintances.
The first and second trials found not guilty on the charge that Hankook Tire improperly supported MKT. On the charge that the chairman lent 5 billion won of MKT funds to Lihan despite knowing its management was in poor shape due to personal ties with its CEO, the first trial found guilty, but the second trial found not guilty.
Charges including using corporate cards for personal purposes, assigning the company chauffeur to serve the spouse, and purchasing or leasing vehicles under affiliate names were affirmed as guilty by the Supreme Court after the first and second trials. The final recognized amount of embezzlement and breach of trust is about 2 billion won.
The chairman and an acquaintance had the corporate card bills of Hankook Tire affiliates, which they used for personal purposes, paid with company funds, gaining 580 million won in benefits. In addition, they gained 430 million won in benefits by assigning Hankook Tire's chauffeur to serve the spouse exclusively.
The chairman also colluded with an affiliate executive, a person surnamed Park, to purchase or lease five vehicles for personal use under the names of Hankook Tire affiliates, gaining 510 million won and the benefit of vehicle use. He also embezzled 260 million won by paying personal moving expenses and furniture expenses with Hankook Tire funds.
The chairman was sentenced to three years in prison at the first trial, but the sentence was reduced to two years at the second trial after the not-guilty reversal on the Lihan support charge. Both the chairman's side and the prosecutor appealed, but the Supreme Court dismissed the appeals.