Hankook Tire CEO replaces CEO of its affiliate who refused to divert money
Hankook Tire CEO replaces CEO of its affiliate who refused to divert money
  • Jung Jun-ho
  • 승인 2019.12.16 09:09
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Chairman Cho Hyun-beom arrested on charges of creating 263 million won in slush funds

The prosecution's indictment on the alleged crimes of Hankook Tire & Technology CEO Cho Hyun-beom, a son-in-law of former President Lee Myung-bak, who was handed to the latest trial, was made public on Dec. 12.

Cho allegedly created 263 million won in slush funds over a decade by replacing the head of affiliate who refused to divert money from the company.

According to the indictment filed by the prosecution to the National Assembly on Dec. 12, Cho embezzled millions of won in corporate funds of a facility management service company, S, that he and his family own 100 percent stake from May 2008 to November 2017.

After instructing the head of Hankook Tire's general affairs team to create extra funds every month (transaction funds that are not caught by the accounting books), Cho made it look as if S company had spent the money, and took 177 million won in borrowed-name accounts every month until February 2013.

When the then head of S company reported in March 2013 to the effect that it was “difficult to raise extra funds," he replaced the head with someone else and diverted the money again, prosecutors said.

The newly appointed CEO was a former deputy chief of Hankook Tire's accounting department who retired after taking charge of the major shareholder family's errands, and Cho again pocketed 86 million won in company funds (2 million won every month from May 2014 to November 2017), by inflating the newly appointed CEO's salary and collecting the difference.

Cho is also suspected of receiving 615 million won in back money from the "Lee brothers" importer in return for delivery. Cho pocketed the money by depositing it in borrowed-name accounts under the father's name of an entertainment company employee.

The Seoul Central District Prosecutors' Office on Dec. 9 indicted Cho on charges of breach of trust and embezzlement.

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