Prosecutors Request Arrest Warrants for Bodyfriend Founder and Private Equity Major Shareholder in 'Management Rights Dispute'

The prosecution has requested arrest warrants for Kang Woong-cheol, the former chairman of the board and founder of the massage chair company Bodyfriend, and Han Mo, the major shareholder of the private equity fund Han & Brothers, who are currently in a dispute over the management rights of the company.

[Image source=Yonhap News]

According to the legal community on the 31st, the Major Crimes Investigation Division of the Seoul Central District Prosecutors' Office (Chief Prosecutor Eo In-sung) filed arrest warrants the day before against the two men and Yang Mo, an associate of Han, on charges of embezzlement and breach of trust.

Han & Brothers had previously filed a complaint with the prosecution last year against former Chairman Kang on charges of embezzling 6.2 billion KRW in employee invention compensation and causing damage to the company, as well as improper use of corporate credit cards. In response, former Chairman Kang also filed a counter-complaint against Han and Yang on suspicion of misappropriating company funds, including paying for luxury hotel suite stays with corporate credit cards.

Han & Brothers, together with Stonebridge Capital, established BF Heart Investment Purpose Company to acquire shares in Bodyfriend, but later was excluded from management due to conflicts with Stonebridge and former Chairman Kang. Former Chairman Kang is the second-largest shareholder of Bodyfriend following BF Heart Investment Purpose Company and currently serves as an inside director of Bodyfriend.

Earlier, the prosecution conducted a search and seizure at Bodyfriend’s headquarters and Han & Brothers’ office in April and has been investigating the case since. The pre-arrest detention hearing for former Chairman Kang and others is scheduled for the 4th of next month.