Trial begins for executives who ran Yoo’s empire

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Trial begins for executives who ran Yoo’s empire

After the trial of crew members accused of abandoning the sinking ferry Sewol kicked off a week ago, legal proceedings against key executives of the group that operated the ferry began yesterday at Incheon District Court.

Eight people who held top positions at subsidiaries of the operator are charged with embezzlement and negligence of duty.

Prosecutors allege that the eight defendants helped siphon off corporate funds to give to Yoo Byung-eun, the patriarch of the family behind Chonghaejin Marine Company. The amount of money that the men allegedly took from the subsidiaries is estimated to be up to 26 billion won ($25.45 million).

The charged men include Song Kook-bin, president of direct marketing affiliate Dapanda. Song allegedly helped Yoo siphon off approximately 50 billion won from Dapanda by disguising it as commission fees, according to prosecutors.

Lee Gang-se and Lee Jae-young, the former and current presidents of affiliate Ahae Corporation, were also defendants. Ahae Corporation is a paint manufacturer owned by the Yoo family.

The authorities are claiming that Yoo often sold his photographic works to the paint company to extract money. The current president of the paint company allegedly purchased Yoo’s works on behalf of Ahae, while the former president helped Yoo extract more than 1 billion won from Ahae through an illegal lending scheme.

Yoo and his two sons are already facing a range of corruption charges, including embezzlement, tax evasion and illicit foreign trading.

The former president of Ahae said that those actions were company custom and had taken place before he became Ahae CEO.

Song Kook-bin, president of Dapanda, echoed that sentiment yesterday, claiming that corporate practices were directed by the second-oldest son of Yoo Byung-eun, Yoo Hyeok-gi.

The prosecutors in the court stated that the corporate culture of the companies controlled by the Yoo family is a far cry from that of typical companies.

“All of the high-ranking officials, shareholders and auditors consist of members of a religious sect led by Yoo,” a prosecutor said during the procedure.

“So there was no system to counter or monitor Yoo and the owning family.”

Prosecutors in court yesterday said that the income of Yoo and his four sons and daughters reported between 1999 and 2013 was estimated to be 56.7 billion won while some of the family businesses posted losses during that time.

“This type of corporate structure and culture could facilitate exploitation,” the prosecutors said.

For the forthcoming trials, the prosecutors will focus on pressing their claims that the patriarch ordered the financial misconducts.

The 15 crew members being tried separately are accused of leaving behind trapped passengers as the Sewol listed and capsized April 16 while ordering them to stay put.

The main focus of that trial is whether four senior crew members will be convicted of homicide.

The manhunt for Yoo Byung-eun continues, but there have been no tip-offs from the public about his whereabouts.


Correction and rebuttal statement by the Evangelical Baptist Church

The Korea JoongAng Daily, regarding the reports since April 16, 2014, about the Evangelical Baptist Church (EBC) and Yoo Byung-eun, is publishing the following corrections and an excerpt from the rebuttal statement by the EBC.


Through three past investigations by the prosecution, it has been revealed that Yoo and the EBC, also known as the “Salvation Group” and Guwonpa in Korean, are not related to the Odaeyang mass suicide incident. That was also confirmed by the prosecution in its official statement on May 21. The prosecution’s investigation also found that Yoo had not made an attempt to smuggle himself out of the country or seek political asylum in France. We, therefore, correct the concerned reports.

Yoo retired from his executive management position in 1997. He did not own any shares in the noted companies, nor had he managed operations or used the operating funds for personal reasons. There are no grounds to call him the actual owner and chairman of the company. As such, he did not provide any directives in regards to the overloading of the Sewol ferry or its renovation.

It was verified that the captain and crew members who abandoned ship at the time of the Sewol ferry accident are not members of the EBC. It has also been verified that the EBC does not own any shares of Chonghaejin Marine Company and did not engage in its management.

Rebuttal statement

The EBC’s position is that the museums in the United States and Europe can never authorize an exhibition unless the artistic value of an artist’s works is recognized by the screening committee, irrespective of the amount of money an artist donates. The EBC’s position is that the exhibitions were not a result of Mr. Yoo’s patronage or donation, and Yoo also has not coerced Chonghaejin and its affiliates to purchase his photos.

The EBC states that Yoo did not participate in the foundation of the EBC in 1981, and the church does not offer him the title “pastor.” It also says a significant part of the 240 billion won ($206 million) worth of assets suspected of belonging to the Yoo family are real estate properties owned by the farming associations, which had been established by church members.

The EBC states that there are certain churches in Korea that call the EBC a cult, solely based on differences between their’s and the EBC’s doctrines.

But the EBC does not worship a particular individual as a religious sect leader or preach any doctrine that contradicts the Bible.

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