Prosecutors Arrest and Indict Choi Sun-won, Chairman of SK Networks, on Charges of Embezzlement and Breach of Trust Amounting to 223.5 Billion Won

SK Group Headquarters Raided... Prosecutors: "Chairman Chey Tae-won Is Not Subject to Investigation or Search"

SK Building, Seorin-dong, Jongno-gu, Seoul.

[Asia Economy Reporter Choi Seok-jin] On the 5th, the prosecution indicted Choi Shin-won, chairman of SK Networks (68), on charges of embezzlement and breach of trust involving approximately 220 billion KRW.

On the same day, the prosecution also conducted a search and seizure at the SK Group headquarters to verify whether SK Group was involved in the process of creating slush funds by Chairman Choi.

The Anti-Corruption Investigation Division 1 of the Seoul Central District Prosecutors' Office (Chief Prosecutor Jeon Jun-cheol) indicted Chairman Choi on charges including embezzlement, breach of trust, fraud under the Act on the Aggravated Punishment of Specific Economic Crimes (hereinafter referred to as the Act on Aggravated Punishment), violations of the Capital Markets Act, the Real Name Financial Transactions and Confidentiality Act, and the Foreign Exchange Transactions Act.

According to the prosecution, Chairman Choi is accused of lending 15.5 billion KRW of SK Telesys funds without collateral to his personal company A, which was promoting a private golf course development project, in April 2009 (breach of trust under the Act on Aggravated Punishment).

He is also accused of withdrawing 16.4 billion KRW of SK Telesys funds without accounting treatment in September 2012 and using it for his personal paid-in capital increase related to SK Telesys (embezzlement under the Act on Aggravated Punishment).

In October of the same year, Chairman Choi is charged with fraud and violation of the Capital Markets Act by deceiving the New Growth Engine Fund into subscribing to 27.5 billion KRW worth of bonds with warrants (BW) issued by SK Telesys, making it appear as if he had paid the capital increase amount with personal funds during the paid-in capital increase.

Between September 2011 and June 2015, when SK Telesys, which he independently operated, faced a bankruptcy crisis, he is accused of breach of trust under the Act on Aggravated Punishment by refusing the SKC board's demand to disclose SK Telesys accounting data and conduct a management diagnosis to decide on participation in the paid-in capital increase, yet having SKC participate in SK Telesys's paid-in capital increase three times totaling 93.6 billion KRW.

Investigations revealed that the amount embezzled and breached of trust by Chairman Choi from six companies he operated, including SK Networks, SKC, and SK Telesys, under the pretexts of promoting a private golf course business, paying false salaries to family members, paying personal paid-in capital increase funds, and supporting insolvent affiliates, amounts to 223.5 billion KRW.

Additionally, he is charged with violating the Real Name Financial Transactions and Confidentiality Act by exchanging approximately 1.6 billion KRW in 158 cases under employees' names to evade reporting regulations for illegal purposes in December 2017, and violating the Foreign Exchange Transactions Act by carrying about 900 million KRW in foreign currency abroad without reporting on 17 occasions from February 2016 to January 2018.

Meanwhile, the prosecution conducted a search and seizure at the SK Group headquarters in Jongno-gu, Seoul, on the same day. It is known that the prosecution is investigating the connection between Chairman Choi's crimes and SK Group.

However, the prosecution clarified that SK Group Chairman Chey Tae-won was neither booked nor the subject of the search and seizure related to this investigation.

A prosecution official stated, "We plan to continue investigating some remaining charges against the indicted defendant (Chairman Choi Shin-won) and related parties."

This content was produced with the assistance of AI translation services.