[Asia Economy Reporter Kim Daehyun] The Criminal Division 7 of the Seoul Central District Prosecutors' Office (Chief Prosecutor Seong Sangwook), investigating allegations of slush fund creation at Shinpung Pharmaceutical, filed an arrest warrant for former CEO Jang Wonjun on the 19th. Former CEO Jang is the son of the late Jang Yongtaek, the founder of Shinpung Pharmaceutical.
Former CEO Jang is accused of embezzlement and breach of trust under the Specific Economic Crimes Act for allegedly conspiring with executive A (arrested and indicted) from April 2011 to March 2018 to create a slush fund worth approximately 5.7 billion KRW by conducting fictitious transactions with pharmaceutical raw material suppliers and receiving the difference back. He is also charged with violating the External Audit Act for falsifying and disclosing Shinpung Pharmaceutical's financial statements.
It is reported that the supplier inflated the raw material unit price and issued tax invoices, but only promissory notes corresponding to the actual unit price were paid, with the remainder used to create the slush fund.
The prosecution plans to expand the investigation, considering the possibility that the slush fund was used in the succession process of the owner family.
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