Hanwha probe ends with 11 indicted

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Hanwha probe ends with 11 indicted


Bong Wook, left, deputy chief prosecutor of the Seoul Western District Prosecutors’ Office, gives a press briefing about the office’s investigation results of Hanwha Group’s slush fund allegations yesterday at the main conference room of the office in Mapo District, Seoul. [NEWSIS]

Wrapping up its 137-day probe, the Seoul Western District Prosecutors Office yesterday filed indictments against 11 people including Hanwha Group Chairman Kim Seung-youn on charges of breach of trust.

Kim and 10 other Hanwha executives and accountants were accused of embezzling corporate money to create slush funds, consequently incurring a large loss to the group’s affiliates and shareholders.

“The affiliates, shareholders, creditors and investors were estimated to suffer from a total loss of 646.6 billion won ($580.4 million) due to their breach of trust,” said Bong Wook, a senior prosecutor who was in charge of the case.

Among the Hanwha executives indicted yesterday was Hong Dong-ok, former chief financial officer for the group and now CEO of petrochemical company Yeochun NCC. A senior executive of the accounting firm Samil PricewaterhouseCoopers was also indicted yesterday of assisting Hanwha’s alleged financial crimes.

According to the prosecution, the 11 people were indicted on charges of sending 320 billion won of corporate money from 2004 to 2006 to pay the debts of companies that were owned by Kim but disguised as Hanwha subsidiaries. They were also accused of selling stakes in two Hanwha affiliates at deliberately cheap prices to Kim’s family, incurring a 104.1 billion won of loss to the group.

The indictments also included charges of creating 107.7 billion won in slush funds using 382 bank accounts, bonds and cash reserves, to evade taxes.

According to the prosecution, they also assisted moves to solidify Kim’s ownership of the company by supporting an illegal transfer of shares in the group to Kim’s three sons. The prosecution said the investigation has revealed serious crimes that could result in up to a 20-year prison term for Kim.

The nation’s 10th largest conglomerate yesterday issued a statement rejecting the prosecution’s indictments. “Rightful management actions were misunderstood and we cannot accept the charges,” the statement said. “In the courtroom, we will actively explain our position against the indictments.”

Since the probe was launched in August 2010, the prosecution summoned 321 people for questioning, conducted 13 raids and tracked down transaction records of hundreds of accounts. “The probe was wrapped up for the parts that we have filed indictments, but another investigation is still ongoing for the alleged obstruction of justice by the conglomerate,” Bong said. “We will conclude that part as soon as possible.”

While the prosecution has complained about Hanwha’s attempts to destroy evidence during its probe, its requests to obtain warrants to detain key suspects were repeatedly struck down by a local court.

The rejections of warrants have fueled criticism in the business community that the prosecution was pushing its probe too far. Amid the growing criticism, Nam Ki-choon, head of the Seoul Western District Prosecutors’ Office in charge of the probe, abruptly submitted his resignation on Friday.

“We have tried to prove the charges through data and evidence, not just relying on testimonies,” said Bong, in a clear dismissal of the growing criticism.

“It was a fight against the corrupt practice of owning accounts and banks in other people’s names,” said Bong. “It was the first time that the prosecutors have gotten to the bottom of this kind of corruption. I hope the probe has served as a chance to look back at problems that encourage obscure management.”

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

Related Korean Article [연합]

김승연 회장 등 11명 기소…한화수사 일단락
회사에 6천400억대 피해…검찰 수사결과
"증거인멸 수사로 관련자 추가기소 예정"

한화그룹 비자금 의혹을 수사해온 서울서부지검 형사5부(이원곤 부장검사)는 30일 수사결과 발표를 통해 김승연 한화그룹 회장을 거액의 손실을 회사에 떠넘긴 혐의(특별경제범죄가중처벌법상 배임.횡령 등) 등으로 불구속 기소했다고 밝혔다.

또 범행을 도운 홍동옥 전 그룹 재무총책임자(CFO)와 남영선 ㈜한화 대표, 삼일회계법인 김모 상무 등 김 회장의 측근과 회계사 10명도 같은 혐의로 불구속 기소했다.

이로써 지난해 9월16일 그룹 본사의 압수수색으로 시작된 한화 비자금 공개수사는 137일 만에 사실상 일단락됐다.

검찰에 따르면 김 회장 등은 2004∼2006년 위장계열사의 빚을 갚아주려고 3천200여억원대의 횡령ㆍ배임을 하고, ㈜한화S&C와 ㈜동일석유 주식을 김 회장의 세 아들과 누나에게 헐값에 매각해 1천41억여원의 손실을 그룹에 입힌 혐의를 받고 있다. …

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