Latest Won Choi, SK Networks Chairman, Accused of Breach of Trust
[Asia Economy Reporter Choi Seok-jin] The prosecution, which is investigating Choi Shin-won, chairman of SK Networks (68), who was arrested and indicted on charges including embezzlement and breach of trust involving approximately 220 billion won, summoned Cho Dae-sik, chairman of the SK Supex Council and considered the second-in-command of SK Group, for a marathon interrogation lasting about 15 hours before releasing him.
The Anti-Corruption Investigation Division 1 of the Seoul Central District Prosecutors' Office (Chief Prosecutor Jeon Jun-cheol), which has been investigating allegations of corruption against Chairman Choi, questioned Chairman Cho as a suspect from 10 a.m. on the 7th until around 12:40 a.m. on the 8th, for approximately 15 hours. The prosecution also summoned Cho Kyung-mok, CEO of SK Energy, on the same day as a witness for questioning.
The prosecution believes that in 2015, SKC forced an investment of 70 billion won into a capital increase of SK Telesys, which was in a state of capital erosion, causing losses to the listed company SKC.
Earlier, when indicting Chairman Choi, the prosecution applied charges of breach of trust under the Act on the Aggravated Punishment of Specific Economic Crimes, alleging that between September 2011 and June 2015, when SK Telesys, independently operated by Chairman Choi, faced a crisis of bankruptcy, he decided to receive a capital increase from SKC, where he was chairman, and despite the SKC board's demand to disclose SK Telesys’s accounting data and conduct a management diagnosis to determine participation in the capital increase, he refused and caused SKC to participate in SK Telesys’s capital increase three times, totaling 93.6 billion won.
At that time in 2015, Chairman Cho and CEO Cho were respectively the chairman of the SKC board and the head of the finance team at SK, the holding company.
During this investigation, the prosecution is known to have focused on questioning the two about how the decision to participate in the capital increase was made and whether there was group-level support.
On March 5, the prosecution arrested and indicted Chairman Choi on charges including embezzlement, breach of trust, fraud under the Act on the Aggravated Punishment of Specific Economic Crimes, violations of the Capital Markets Act, the Real Name Financial Transactions Act, and the Foreign Exchange Transactions Act. On the same day, they also conducted a search and seizure at SK Group’s headquarters in Jongno-gu, Seoul, investigating the connection between Chairman Choi’s crimes and SK Group.
At that time, a prosecution official stated, "SK Group Chairman Chey Tae-won has not been booked or subjected to search and seizure," but added, "We plan to continue investigating some remaining charges against the indicted defendant (Chairman Choi Shin-won) and related parties."
However, in the business community, there are also opinions that since SK Telesys turned a net profit from the year following SKC’s capital increase in 2015 and succeeded in corporate rehabilitation, this should be regarded as normal business activity.
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