Former Eastar Jet CEO Choi Jong-gu Denies Wage Arrears and Embezzlement Charges

[Asia Economy Reporter Lee Jung-yoon] Choi Jong-gu, former CEO of Eastar Jet, who was indicted on charges of 'employee wage arrears and embezzlement,' denied the charges in court.

On the 25th, at the first trial session held under the presiding of Judge Choi Woo-jin of Criminal Division 8 at the Seoul Southern District Court, Choi's defense team stated, "We deny all the prosecution's allegations."

The defense attorney said, "While we acknowledge the fact of wage arrears, there were circumstances such as deteriorating management conditions at the time that made it impossible to pay wages," adding, "The defendant did his best to pay the wages, so there was no intent to withhold payment, and responsibility should be mitigated."

Regarding the embezzlement charges, they argued, "At that time, all funds of Eastar Jet were managed by Jeju Air, which was in the process of acquisition," and "The defendant was unaware that the four major social insurance premiums withheld from employees' wages were unpaid."

Choi was indicted on charges of withholding tens of billions of won in wages and severance pay from Eastar Jet employees and embezzling amounts withheld for the four major social insurance premiums from employee wages to use as company operating funds.

After the merger and acquisition (M&A) with Jeju Air fell through in July last year, Eastar Jet, which was experiencing financial difficulties, was recently acquired by Seongjeong Co., Ltd., a golf course management and real estate rental company. This came 1 year and 9 months after entering an emergency management system in September 2019 and beginning the sale process. Choi's defense team argued, "Since the unpaid wages will be paid as soon as acquisition funds come in from Seongjeong, there is no need to deliberate on the violation of the Labor Standards Act." Judge Choi partially accepted this and decided to begin the next trial session with an investigation of evidence related to the embezzlement charges.