The chief of tire giant Hankook Tire & Technology Co. was indicted Monday on charges of illicit inter-affiliate trading, embezzlement and breach of trust, prosecutors said.
Chairman Cho Hyun-bum was charged for his involvement in Hankook Tire's purchase of overpriced tire molds from its affiliate, Hankook Precision Works Co., according to the Seoul Central District Prosecutors Office.
The unfair business practice, worth 87.5 billion won (US$67.3 million), and lasting from 2014 to 2017, allegedly inflicted financial losses of around 13 billion won on Hankook Tire, they said.
Prosecutors suspect the unfair profits obtained by Hankook Precision Works eventually were pocketed by Cho and his family.
Cho is also suspected of funneling corporate funds worth billions of won for personal use, including the purchase of high-end imported cars and home repairs between 2017 and 2022, prosecutors said.
He allegedly allowed his family members to use corporate cards for personal purposes, such as a family trip, and let his acquaintances use corporate cards as well, they said.
Cho also allegedly forced Hankook Precision Works to lend around 5 billion won of the company funds to financially ailing automobile parts maker Leehan Corp., whose chief Cho had close ties with, prosecutors said.
Prosecutors suspect the amount of Cho's embezzlement and breach of trust reached over 7.5 billion won.
Cho has already been placed under pretrial detention.
Source: Yonhap News Agency