Lee Sang-young, chairman of Daewoo Industrial Development, and former CEO Han Jae-jun, who are accused of accounting fraud worth 100 billion KRW and embezzlement and breach of trust worth hundreds of billions of KRW, were arrested on the 29th.
Lee Sang-young, Chairman of Daewoo Industrial Development (left), and Han Jae-jun, former CEO of Daewoo Industrial Development, are heading to the courtroom on the morning of the 29th at the Seoul Central District Court in Seocho-gu, Seoul, to attend a warrant hearing related to allegations of embezzlement, breach of trust, and fraud under the Act on the Aggravated Punishment of Specific Economic Crimes. [Image source=Yonhap News]
On the same day, Yoo Chang-hoon, the presiding judge in charge of warrants at the Seoul Central District Court, issued arrest warrants for Chairman Lee and former CEO Han on charges including embezzlement under the Act on the Aggravated Punishment of Specific Economic Crimes. Judge Yoo explained the reason as "concern over evidence destruction." The two, who were awaiting the pre-arrest suspect interrogation (warrant substantive examination), immediately underwent the arrest procedure.
They are accused of falsifying and disclosing financial statements by underestimating allowance for doubtful accounts from 2016 to 2021, committing accounting fraud worth approximately 143 billion KRW (violation of the External Audit Act). They are also charged with fraud under the Act on the Aggravated Punishment of Specific Economic Crimes for borrowing a total of 47 billion KRW from seven financial institutions based on false financial statements from May 2018 to July last year. Additionally, they are accused of embezzling about 14 billion KRW of company funds for personal use and causing damage worth 51.8 billion KRW to the company over about ten years from 2013 to last year (embezzlement and breach of trust under the Act on the Aggravated Punishment of Specific Economic Crimes).
Former CEO Han is charged with embezzling 12.2 billion KRW of company money and causing damage worth 3.1 billion KRW, while Chairman Lee is accused of forging and using a document resigning from the CEO position under Han’s name last September after their relationship soured. The police applied for arrest warrants for them at the end of January, but the court dismissed the request. The Seoul Central District Prosecutors’ Office Tax Crime Investigation Division (Chief Prosecutor Min Kyung-ho), which took over the case, identified additional signs of accounting fraud worth hundreds of billions of KRW during supplementary investigations and re-applied for arrest warrants on the 24th.
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