Court Denies Arrest Warrant Request
Attention on Judicial Processing of Former Chairman Kim Giyu
Former Taekwang Group Chairman Lee Hojin has avoided detention, alleviating the burden of judicial risks. While actively responding to the charges against him, he is also expected to begin steps toward returning to management in earnest.
A Taekwang Group official stated on the 17th, "After resolving the judicial risks, changes aimed at normalizing management are expected," hinting at Lee's return to management.
Former Taekwang Group Chairman Lee Hojin, who is accused of embezzlement and breach of trust under the Act on the Aggravated Punishment of Specific Crimes, is appearing at the Seoul Central District Court on the 16th to attend the pre-arrest interrogation. Photo by Huh Younghan younghan@
Earlier, the Seoul Central District Court conducted a warrant hearing for former Chairman Lee, who faces charges of embezzlement and breach of trust under the Act on the Aggravated Punishment of Specific Economic Crimes, but dismissed the request for an arrest warrant. The police had requested the warrant, alleging that Lee created slush funds exceeding 2 billion KRW by having group executives appear to work simultaneously at other affiliates, receiving double salaries, and then reclaiming them.
Taekwang plans to determine the timing of Lee's return based on whether former Taekwang Group Management Council Chairman Kim Giyu, who was the group's second-in-command, faces judicial action. Kim has been managing Taekwang Group for over a decade since 2014, when Lee's judicial risks intensified. After Lee was reinstated through a special pardon on Liberation Day last August, the company dismissed Kim and conducted a large-scale internal audit, uncovering various suspicions surrounding him.
During the audit, Taekwang confirmed that Kim created slush funds amounting to around 10 billion KRW by inflating construction costs through Tisis, which manages the group's real estate and golf courses, and reported this to the Seoul Western District Prosecutors' Office. Kim is currently under prosecution investigation for allegedly inflating construction costs and awarding contracts to acquaintances during the 2015 expansion of the Taekwang Country Club clubhouse.
Taekwang stated, "It will soon be revealed that the charges against former Chairman Lee are crimes committed by former Chairman Kim."
Lee was previously detained in 2011 on charges including embezzlement of company funds but was released on medical bail due to health issues and was re-incarcerated in 2018. He was released at the end of his sentence in 2021 but was unable to immediately return to management due to employment restrictions and health problems.
At the end of last year, Taekwang Group renewed its governance by appointing Sung Hoeyong, CEO of T-Cast, as CEO of Taekwang Industrial during executive personnel changes. They formed a Future Committee chaired by CEO Sung to establish a board-centered independent management system for affiliates aimed at advancing governance and plan to strengthen environmental management to actively respond to climate change.
It is expected that the return of the owner will accelerate the management pace that had been stalled. Although Taekwang announced a mid-to-long-term investment plan in 2022 to invest 12 trillion KRW over the next ten years in manufacturing, finance, and service sectors, execution has been delayed.
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