Posco Holdings Executives Under Investigation for Misuse of Funds

Seoul - The Seoul Central District Prosecutors Office is currently investigating allegations of financial misconduct involving senior members of Posco Holdings, a major South Korean steelmaking company. According to the Korea Herald editorial dated January 15, the investigations are centered on 12 board members and four executives, including Posco Holdings chief executive and chairman Choi Jeong-woo.

According to Yonhap News Agency, these officials are accused of occupational breach of trust. The primary focus is on a luxurious five-night-seven-day trip to Canada in August of the previous year, allegedly partially funded by subsidiaries of Posco Holdings. The cost of the trip is estimated at 680 million won ($517,000), with around 350 million won paid by Posco Holdings and the remaining by its subsidiaries, Posco-Canada and Posco.

The allegations include inappropriate expenditures such as 100 million won on dining and 170 million won on charter flights and helicopter services for travel within Canada. The group reportedly held a board meeting in Vancouver, engaged in leisure activities like golf, and stayed in high-end accommodation costing 1.75 million won per night.

Furthermore, some board members, including outside directors who are professors, are suspected of violating laws against improper solicitation and graft. The civic group from Pohang, where Posco Holdings is based, filed a complaint last month, leading to these investigations. The complaint also suggests that the chairman attempted to influence the re-election process for his third term by lobbying seven outside directors.

Choi, who has been with Posco Group since July 2018 and was reelected for a second term in March 2021, was not listed as a CEO candidate in the recent committee meeting. The seven outside directors in question were appointed during Choi's tenure.

The National Pension Service, Posco Holdings' largest shareholder, has criticized the committee's organization as unfair. Despite Choi's role in transforming Posco with investments in secondary batteries, his absence from state delegations led by President Yoon Suk Yeol has been noted.

Posco, established in 1968 with Japanese loans, holds significant historical and economic value in South Korea. The company's global standing as a leading steelmaker underscores the gravity of these allegations and the need for a thorough investigation.

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