Cho Hyun-beom Withdraws Voluntary Resignation from Appointment as Inside Director Amid Judicial Risk Concerns

Sudden Withdrawal 3 Days Before General Meeting
Stepping Down Considering Ongoing Trial Situation

Cho Hyun-beom, chairman of Korea & Company, who is suspected of unfair support to affiliates and embezzlement and breach of trust, is attending a continuation trial held at the Seoul Central District Court in Seocho-gu, Seoul on the 11th. Photo by Kang Jin-hyung aymsdream@

Cho Hyun-bum, Chairman of Hankook Tire & Technology (hereinafter Hankook Tire), has decided not to seek reappointment as an inside director. It appears that the ongoing trial over allegations of unfair support to affiliates ultimately became a burden.

On the 25th, Hankook Tire announced that it would delete two agenda items, including Chairman Cho’s reappointment as an inside director, from the agenda of the upcoming regular shareholders' meeting scheduled for the 28th. Hankook Tire explained, "The agenda items are withdrawn as some candidates resigned from their positions as directors and audit committee members due to personal reasons."

Although Chairman Cho secured enough friendly shares after winning the management rights dispute, the ongoing litigation seems to have been a burden. Previously, Cho was indicted on charges of involvement in unfair support by Hankook Tire purchasing tire molds worth approximately 87.5 billion KRW from its affiliate Hankook Precision Works (MKT) between February 2014 and December 2017 at prices higher than other manufacturers. In March last year, Cho was detained on charges of embezzlement and breach of trust involving amounts in the 20 billion KRW range and unfair support to affiliates, serving eight months in prison before being released on bail in November of the same year.

An industry insider said, "No matter how high the shareholding is, pushing for reappointment as an inside director while the trial is ongoing could be seen as not showing genuine remorse, which might antagonize the court," adding, "The board of directors also seemed to be concerned about external backlash, as various organizations issued statements opposing the appointment of Chairman Cho, who is embroiled in litigation."

On the same day, labor and civic groups including People’s Solidarity for Participatory Democracy, Financial Justice Solidarity, the Korean Bar Association, the Institute for Social Economy, the Korean Confederation of Trade Unions, and the Korean Metal Workers’ Union issued a joint statement saying, "Chairman Cho was indicted and detained in March last year for embezzlement and breach of trust involving company funds used for home renovations and purchasing luxury foreign cars, and was additionally indicted on charges of breach of trust," and demanded, "The management of Korea & Company and Hankook Tire, which have completely lost their self-regulatory functions, must immediately resign from all group board positions, and Chairman Cho must also resign from his inside director position at the holding company Korea & Company, where he attended only one out of nine board meetings in 2023."

Hankook Tire stated, "Considering the ongoing trial of Chairman Cho, we decided to withdraw the agenda items," and refrained from further comment.