Court to Hold First Trial This Week for Choi Sun-won, SK Networks Chairman, on Embezzlement and Breach of Trust Charges Worth 220 Billion Won

Chairman Choi Seon-won of SK Networks.
Photo by Yonhap News

[Asia Economy Reporter Choi Seok-jin] The trial of Choi Shin-won, chairman of SK Networks (68), who has been indicted on charges including embezzlement and breach of trust involving approximately 220 billion KRW, is set to begin this week.

According to the legal community on the 28th, the Seoul Central District Court Criminal Division 23 (Presiding Judge Yoo Young-geun) will hold the first preparatory hearing on the 30th morning for Choi, who was detained and indicted on charges including embezzlement, breach of trust, fraud under the Act on the Aggravated Punishment of Specific Economic Crimes (hereinafter referred to as the Specific Economic Crimes Act), violations of the Capital Markets Act, the Real Name Financial Transactions and Confidentiality Act, and the Foreign Exchange Transactions Act.

Unlike the main trial, the preparatory hearing, which organizes the prosecution’s charges, key issues, and evidence list before the full trial, does not require the defendant’s attendance, so Chairman Choi is expected not to appear in court.

According to the prosecution, Choi is accused of lending 15.5 billion KRW from 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 Specific Economic Crimes Act).

He is also charged with embezzling 16.4 billion KRW from SK Telesys funds in September 2012 by withdrawing the money without accounting and using it for his personal paid-in capital increase related to SK Telesys (embezzlement under the Specific Economic Crimes Act).

In October of the same year, Choi is accused of fraud and violating 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 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, Choi allegedly breached trust by refusing the SKC board’s demand to disclose SK Telesys accounting data and conduct a management diagnosis to decide on participation in a paid-in capital increase, yet caused SKC, where he was chairman, to participate in SK Telesys’s paid-in capital increase three times totaling 93.6 billion KRW.

The amount embezzled and breached by Choi from six companies he operated, including SK Networks, SKC, and SK Telesys, under the pretexts of promoting a personal golf course project, paying false salaries to family members, paying personal paid-in capital increase funds, and supporting insolvent affiliates, has been investigated to reach 223.5 billion KRW.

Additionally, he is charged with violating the Real Name Financial Transactions 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.

Earlier, on the 5th, the prosecution conducted a search and seizure at the SK Group headquarters in Jongno-gu, Seoul, after indicting Chairman Choi.

The prosecution is reportedly investigating the connection between Choi’s crimes and SK Group.

At that time, a prosecution official stated, "SK Group Chairman Chey Tae-won has not been booked or targeted for search and seizure," but added, "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.