bhc Accuses BBQ Chairman Yoon Hong-geun of 8.3 Billion KRW Embezzlement... Legal Battle Intensifies

[Asia Economy Reporter Seungjin Lee] bhc has filed a complaint against Chairman Yoon Hong-geun of BBQ on charges of breach of trust.

bhc announced on the 20th that it recently filed a complaint with the Seongnam Sujeong Police Station against Chairman Yoon and three others for violating the Act on the Aggravated Punishment of Specific Economic Crimes (breach of trust) and requested a thorough investigation.

In the complaint, bhc claimed that the Yoon family, who owns 100% of the shares in a private company, improperly lent several billion won, causing damage to the company. They added that they requested an investigation to sound an alarm against wrongful management practices due to the failure of the managers to fulfill their duty of care.

GNS Highnet is a multi-level marketing company established in 2013 through Chairman Yoon's personal investment. This company is 100% owned by Chairman Yoon and his son and is neither an affiliate nor a subsidiary of Genesis or BBQ. Prior to establishing GNS Highnet, Chairman Yoon sold the affiliate bhc for 120 billion won due to worsening management conditions.

Since its establishment, GNS Highnet has continuously suffered losses. Genesis, wholly owned by Chairman Yoon and his two children, lent a total of 7.165 billion won to GNS Highnet. BBQ also lent 1.19661 billion won in November 2016, and bhc views this as a case of breach of trust in the course of business.

A bhc official stated, "BBQ withdrew from the business without securing even the minimum measures to guarantee the recovery of the loan from GNS Highnet, a personal company of Chairman Yoon, and has not made efforts to recover the outstanding amount for over four years. There is intentional breach of trust in attempting to promote personal business with affiliate company funds, and a thorough investigation is necessary to sound an alarm against wrongful ownership and management practices."

Meanwhile, bhc and BBQ, once part of the same root, continue to engage in various civil and criminal lawsuits over conflicts such as trade secret leaks. bhc Chairman Park Hyun-jong was indicted last November on charges of accessing BBQ’s internal computer network twice by stealing IDs and passwords of former and current BBQ employees in July 2015. At the first trial held last month, bhc denied all charges, and both sides engaged in intense legal battles.

Prior to this, bhc won a lawsuit against BBQ for claims including product supply payments, receiving a payment judgment of approximately 29 billion won. bhc also won in the appeal trial regarding BBQ’s claim for land damage compensation in Icheon City, and the two sides have been embroiled in a mudslinging fight for years.