Former CEO of 'Joeun Saramdeul' Sent to Prosecution for Embezzling Hundreds of Billions of Won in Company Funds

Embezzlement Charges Under Special Act
Estimated Embezzled Amount Approximately 36 Billion KRW

[Asia Economy Reporter Oh Gyumin] The police have sent former CEO Lee Jonghyun of the underwear specialty company ‘Joheun Saramdeul’ to prosecution custody on charges of embezzling hundreds of billions of won of company funds.

The Financial Crime Investigation Unit of the Seoul Metropolitan Police Agency announced on the 30th that on the 27th, they sent former CEO Lee to the Seoul Central District Prosecutors' Office on charges of embezzlement under the Act on the Aggravated Punishment of Specific Economic Crimes.

According to the police, former CEO Lee fabricated transactions with other companies to appear legitimate and embezzled about 36 billion won. Initially, the embezzlement amount was estimated at around 30 billion won, but the police expect the damage amount to increase through additional investigations.

Since March of last year, the police have been investigating former CEO Lee on suspicion of embezzlement. The prosecution requested an arrest warrant for him in March, but he fled without appearing at the pre-arrest suspect interrogation (warrant hearing). The court issued an arrest warrant for him, citing “risk of flight.” Former CEO Lee was arrested and investigated by the police on the 18th, three months after his escape.

Separately, the Joheun Saramdeul branch of the Korean Confederation of Trade Unions’ National Chemical Fiber Union had filed a complaint with the prosecution in April last year against former CEO Lee on charges of embezzlement and breach of trust under the Act on the Aggravated Punishment of Specific Economic Crimes. They claimed that he abused his authority by borrowing 3.65 billion won, and the company entered into contracts that made it jointly liable or responsible for the debt, resulting in a large-scale contingent liability.