Prosecutors Summon Former Namyang Dairy Products Chairman Hong Won-sik for Suspect Investigation

Allegations of Embezzlement and Breach of Trust Involving Approximately 20 Billion KRW

Hong Won-sik, former chairman of Namyang Dairy Products. Photo by Kim Hyun-min

The prosecution summoned former Namyang Dairy Products Chairman Hong Won-sik for questioning as a suspect on allegations of embezzling company funds worth around 20 billion won.

According to the legal community on the 19th, the Fair Trade Investigation Division of the Seoul Central District Prosecutors' Office (Chief Prosecutor Kim Yong-sik) summoned former Chairman Hong as a suspect in the embezzlement case and conducted an investigation the previous day.

Earlier, in August, Namyang Dairy Products filed a complaint with the prosecution against former Chairman Hong and three former executives on charges of embezzlement under the Act on the Aggravated Punishment of Specific Economic Crimes, alleging that they embezzled 20.12223 billion won, equivalent to 2.97% of Namyang Dairy Products' equity capital, as well as charges of breach of trust and acceptance of bribes.

The prosecution is reported to have investigated whether former Chairman Hong received rebates from suppliers as kickbacks for securing business contracts or diverted part of export payments through intermediaries during overseas export processes. It is understood that Hong denied all charges during the prosecution's investigation.

The prosecution is also looking into suspicions that former Chairman Hong charged expenses such as graveyard management, overseas travel, and art purchases to the company, and misused company vehicles and corporate credit cards for personal purposes.

On the 7th of last month, the prosecution conducted searches and seizures at about ten locations, including former Chairman Hong's residence and Namyang Dairy Products' headquarters office. Recently, family members of Hong, suspected of privately misappropriating company funds, were also summoned for questioning one after another.

The prosecution is expected to consider whether to secure custody once the investigation of former Chairman Hong is completed.