Chairman of Hancom Faces Arrest Over 'Slush Fund Allegations'... Group Declares Management Reform

Hancom Board Restructured... Directly Confronting Judicial Risks

Byun Seong-jun and Kim Yeon-su, co-CEOs of Hancom Inc., announced on the 17th that they will reorganize the board of directors of HancomWITH and fully launch management reform efforts within the Hancom Group. This move is described as a direct response to judicial risks amid the situation where Kim Sang-chul, chairman of Hancom Group, is facing detention over allegations of slush fund creation.

The two CEOs plan to hold a board meeting soon and convene an extraordinary general meeting to participate in the management of HancomWITH, the largest shareholder of Hancom and at the top of Hancom Group’s governance structure. While both CEOs will serve as inside directors of HancomWITH, they will also appoint new outside directors. They intend to push for a resolution to appoint Byun Seong-jun as co-CEO of HancomWITH.

CEO Byun currently holds the position of vice chairman of Hancom Group. Since the two CEOs have jointly overseen the overall group management and key businesses, their participation in HancomWITH’s management aims to simplify the group’s governance structure and strengthen management soundness.

As a new outside director, Nam Su-gyun, who previously served as head of Tencent Korea’s investment division, is expected to be nominated. Nam Su-gyun is a figure with successful investment portfolios and initial public offering (IPO) experience centered on major IT companies in global and venture sectors. He is expected to contribute to HancomWITH’s transition from a security company to a financial company.

Through this, they intend to directly confront the recently surfaced judicial risks. On the same day, the prosecution requested an arrest warrant for Chairman Kim on suspicion of creating slush funds using the cryptocurrency Arowana Token. The Arowana Token is a cryptocurrency developed with HancomWITH’s participation.

CEOs Byun Seong-jun and Kim Yeon-su stated, "We will swiftly implement strategic reforms and self-purification efforts to dispel the concerns of many stakeholders including customers, shareholders, investors, and employees, and to meet their expectations and trust."