"Suwon Passenger Financial Director Testifies in Court on Unauthorized Company Fund Approvals"

Sent Money to Company Owned by Kim Bong-hyun and Recorded as 'Loan' for Accounting Purposes

[Asia Economy Reporter Yoo Byung-don] Testimony in court revealed that the Executive Director of Finance at Suwon Passenger Transport handled accurate cash receipts and disbursements without informing the management and accounting team.

A, who worked as the Accounting Director at Suwon Passenger Transport, appeared as a witness on the 9th at the Seoul Southern District Court Criminal Division 13 (Presiding Judge Lee Sang-joo) during the trial of former Star Mobility Chairman Kim Bong-hyun, testifying, "After Executive Director of Finance B took office, the cash management system switched to internet banking, and the procedure of obtaining CEO approval for withdrawals was eliminated."

He continued, "Usually, by the end of the month, we receive bankbook transaction details and supporting documents for accounting processing, but in October and November 2018, after B arrived, the supporting documents did not come, causing delays in accounting processing," adding, "Later, when I asked B, he gave the supporting documents belatedly, asking to keep it confidential without the CEO's knowledge."

Investigations revealed that during this period, B transferred money from Suwon Passenger Transport’s account to four corporate accounts, including a paper company owned by former Chairman Kim. Subsequently, he concealed embezzlement by fabricating false documents suggesting that Suwon Passenger Transport had lent money to or purchased convertible bonds from those corporations.

Also, A stated, "Regarding the withdrawn funds at that time, we accounted for them as 'loans' under B's instructions," and "Regarding the 10.4 billion KRW temporarily deposited after borrowing from a private lender, we trusted B’s statement that it was 'recovered money' and recorded it as is in the books."

Former Chairman Kim was arrested and indicted on charges of embezzling 24.1 billion KRW of company funds from Suwon Passenger Transport from October 2018 to January last year, in collusion with B and others.

Before Kim and others embezzled the company funds, Suwon Passenger Transport was acquired by an asset management company that had borrowed funds from Lime Asset Management. It is known that Lime demanded the employment of B as an executive in exchange for lending acquisition funds to this asset management company.

Kim’s defense attorney questioned, "Even the company management did not know that B was arbitrarily handling cash receipts and disbursements, so how could an outsider like former Chairman Kim have known?" The defense has maintained that Kim only borrowed money from B, whom he knew personally, and is unrelated to the embezzlement.

Meanwhile, Kim Mo, former Star Mobility Director, who was indicted for participating in Kim’s embezzlement, was released on bail on the 7th and will now face trial without detention.