C& chairman indicted in major embezzlement case

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C& chairman indicted in major embezzlement case

Lim Byung-seok, chairman of C& Group, was formally indicted yesterday on charges of embezzlement and breach of trust as part of the growing probe into an influence-peddling scandal involving politicians and financial officials.

Lim and C& Group have been under investigation by the Supreme Public Prosecutors’ Office’s central investigation unit since late last month. Investigators raided the offices of the mid-size conglomerate and arrested Lim on Oct. 21.

According to the prosecution, Lim was accused of embezzling nearly 13 billion won ($11.67 million). Prosecutors said Lim embezzled 9 billion won by forging the contracts of C& Merchant Marine’s sale of two ships in 2004.

Between 2005 and 2008, Lim allegedly embezzled an additional 3.9 billion won through the conglomerate’s affiliate Kwangyang Tugboat Company.

Lim also faced a series of breach-of-trust charges for alleged irregularities in his attempt to rapidly expand his business.

Founded in 1990 as Chilsan Shipping, C& Group grew fast in the early 2000s through hostile takeovers of companies in trouble after the 1997 Asian financial crisis.

But the conglomerate was plagued by financial problems and its key affiliates were on the brink of bankruptcy since 2008. Slush funds with large amounts of money were allegedly raised during the takeovers, prosecutors said.

Lim was also accused of incurring 20.7 billion won in losses for the group through the takeover of Hyosung Metals. He was also suspected of losing another 68.2 billion won by providing unlawful loans to C& Line, despite the affiliate’s poor financial condition.

Lim was also accused of gaining 24.5 billion won in unlawful profit by manipulating the stock prices of C& Woobang. He was also accused of falsifying C& Woobang’s accounting records and receiving 170.4 billion won in loans from banks.

“We were able to confirm that C& Group was involved in all kinds of corruption,” said Wu Byeong-wu, the senior prosecutor in charge of the investigation. “The probe is meant to hold Lim accountable for his crimes of destroying a business in which public funds were injected for its recovery.”

While no charges of influence-buying were included in yesterday’s indictment, the prosecution said it will continue to investigate Lim’s connection to senior politicians and financial officials, including top managers at Woori Bank.

Although Lim admitted during a warrant hearing that he had met politicians, he has denied giving bribes.

By Ser Myo-ja [myoja@joongang.co.kr]

Lim Byung-seok, center, chairman of C& Group, is taken out of the Supreme Public Prosecutors’ Office yesterday to be transported to a detention center after the Seoul Central District Court issued a detention warrant. [NEWSIS]
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