Convicted business tycoons returned to boards

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Convicted business tycoons returned to boards

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Chey Tae-won

Two business tycoons convicted of financial crimes have been returned to their seats on the board by a majority of shareholders’ votes at annual meetings on Friday.

SK Chairman Chey Tae-won was reappointed board director after he was stripped of the title during an investigation involving financial crimes.

The country’s fifth-largest group defended the outcome, saying it was to lead efficient management. However, civic organizations and a state-run institution holding SK shares, raised doubts about the appropriateness.

The vast majority of SK Holdings shareholders voted to re-elect Chey, while the National Pension Service (NPS), the second-largest shareholder with 8.57 percent stake, objected.

The NPS said on Tuesday it would reject to Chey retaking a seat as a board director at SK Holdings because he was convicted of a crime twice, once for breach of trust in 2003 and once for embezzlement in 2012.

SK, however, said that the majority vote showed shareholders’ wish to return Chey to the board.

“For stable management, [shareholders] figured that Chey should come back and lead responsible management,” said Cho Dae-sik, president of Representative Directors.

Chey was released from prison last year on a Liberation Day special pardon, but was soon mired in controversy in December after confessing to having a daughter from an extramarital affair.

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Cho Seok-rae

Hyosung Group Chairman Cho Seok-rae was re-elected as a board director during a regular shareholders meeting at the group’s headquarters in Mapo District, western Seoul. He was sentenced to three years in prison at Seoul Central District Court and slapped with a 136.5 billion won ($117.3 million) fine earlier this year for tax evasion and accounting fraud. He appealed the ruling.

The NPS, which holds 10 percent of shares in Hyosung Group, raised red flags during the shareholders meeting, but Cho was re-elected despite the objections.

Shareholders of Korean Air approved the re-election of Chairman Cho Yang-ho, despite ongoing union troubles.

In contrast to the returning chairmen, Lee Jay-hyun, the chairman of CJ Group who was convicted of financial crimes, will leave the group’s board.

The company said on Thursday it will not renew Lee’s position at CJ Korea Express and Olive Networks during its annual general meeting of stockholders set for March 20.

Lee Jay-hyun was sentenced to two and a half years in prison and given a 25.2 billion won fine for tax evasion and embezzlement in a retrial in December, despite his failing health and constant appeals by business and political heavyweights for clemency.

BY PARK EUN-JEE [park.eunjee@joongang.co.kr]
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