Former BHC Chairman Park Hyunjong, Charged With Breach of Trust and Embezzlement of About 6 Billion Won, Denies Allegations at First Trial

Claims It Was a Legitimate Business Decision to Convert Direct Stores into Franchises
and That Spending on Villa Repairs Was Also Justified

Park Hyunjong, former chairman of BHC

Former BHC Group Chairman Park Hyunjong, who has been indicted on charges of breach of trust and embezzlement involving company funds totaling around 6 billion won, denied the allegations at his first trial.

The 30th Criminal Division of the Seoul Central District Court (Presiding Judge Park Okhee) held the first hearing on the 25th for former Chairman Park, who has been brought to trial on charges including breach of trust under the Act on the Aggravated Punishment of Specific Economic Crimes and occupational embezzlement and breach of trust.

According to the prosecution, former Chairman Park faces charges including: closing two highly profitable directly managed stores and then converting them into franchise outlets operated by his family, thereby causing the company losses of about 3.9 billion won; paying unjustified bonuses totaling 1.7 billion won to certain executives; spending 700 million won of company funds on repairs to a villa used for his personal purposes; and misappropriating costs related to a yacht, amounting in total to breach of trust and embezzlement of company funds in the 6 billion won range.

Former Chairman Park’s side denied all the charges in court that day and argued that he is not guilty.

Regarding the allegations related to the closure of directly managed stores and their conversion into family-operated franchise outlets, former Chairman Park’s side argued that this was “a business decision made from the perspective of corporate restructuring, taking into account cost reduction” and claimed that “there may be losses on a micro level, but on a macro level it was a decision for the benefit of the company, and therefore it cannot constitute breach of trust.”

On the allegations concerning the payment of special bonuses worth several billion won and the spending on villa repairs, they argued that “it is naturally within his authority to reward executives and employees who contributed to achieving 1 trillion won in sales,” and further stated that “the villa is clearly owned by the company and was used to entertain the CEO, major shareholders, and external figures, so the repair expenses were justified.”

The court decided to hold the next hearing at 2 p.m. on March 25 and to begin examining the evidence at that session.