Prosecutors Conduct Search and Seizure at 10 Locations Including Hyundai Tire Chairman Cho Hyun-beom's Residence Over Embezzlement Allegations

[Asia Economy Reporter Kim Hyung-min] The prosecution investigating the 'unfair support of affiliates' case involving Hankook Tire & Technology (Hankook Tire) has also launched a forced investigation into personal corruption related to Cho Hyun-bum, chairman of Hankook Tire.

According to the legal community on the 19th, the Fair Trade Investigation Division of the Seoul Central District Prosecutors' Office (Chief Prosecutor Lee Jung-seop) conducted a search and seizure at 10 locations including Chairman Cho's residence, Hankook Tire headquarters, and affiliates on the morning of the same day on charges of violating the Act on the Aggravated Punishment of Specific Economic Crimes (embezzlement, breach of trust).

Cho Hyun-beom, Chairman of Hankook Tire Photo by Yonhap News

Prosecutors and investigators reportedly carried out the search and seizure to secure materials related to suspicions of embezzlement and breach of trust by Chairman Cho. There are allegations that Chairman Cho misappropriated company funds for personal use, such as purchasing luxury foreign cars and renovating his house. These allegations were initially investigated by the Seoul Western District Prosecutors' Office but were recently transferred to the Fair Trade Investigation Division of the Central District Prosecutors' Office. After reviewing the case records, the Fair Trade Investigation Division applied for a search warrant on the same day, which was issued by the court.

Separately, the prosecution is also investigating Chairman Cho in connection with the 'intervention in unfair support of affiliates' case reported by the Korea Fair Trade Commission (KFTC). On the 11th, the KFTC filed a complaint with the prosecution against Chairman Cho for violating the Fair Trade Act. After summoning Chairman Cho as a witness in December last year, the Fair Trade Investigation Division of the Seoul Central District Prosecutors' Office detected signs of his involvement in the group's illegal activities and requested the KFTC to file a complaint against him. The KFTC holds exclusive authority to file complaints for violations of the Fair Trade Act.

Hankook Tire is suspected of unfairly supporting its affiliate MKT (Korea Precision Works), which manufactured tire molds, by purchasing them at prices higher than other manufacturers from February 2014 to December 2017.