Prosecution Indicts and Detains Shinpoong Pharmaceutical Executive for Creating 5.7 Billion Won Slush Fund

Seoul Central District Prosecutors' Office
[Image source=Yonhap News]

[Asia Economy Reporter Kim Hyung-min] An executive of Shinpung Pharmaceutical, accused of creating slush funds worth 5 billion won, has been brought to trial.

The Criminal Division 7 of the Seoul Central District Prosecutors' Office (Chief Prosecutor Sung Sang-wook) indicted former executive director A of Shinpung Pharmaceutical on the 16th on charges of embezzlement and breach of trust under the Act on the Aggravated Punishment of Specific Economic Crimes, and violation of the External Audit Act.

A is accused of creating slush funds worth approximately 5.7 billion won from April 2011 to August 2017 by conducting fictitious transactions with pharmaceutical raw material suppliers and receiving the difference back.

It is known that when the supplier inflated the raw material unit price and issued tax invoices, Shinpung Pharmaceutical paid only promissory notes corresponding to the actual unit price and embezzled the remainder as slush funds. During this process, it was investigated that Shinpung Pharmaceutical falsified financial statements and disclosed them.

The prosecution plans to continue additional investigations, believing that there may be more slush funds created by Shinpung Pharmaceutical. They are also considering expanding the scope of the investigation to include whether the slush funds were used in the succession process of the owner family, including the involvement of former CEO Jang Won-jun, son of the late founder Jang Yong-taek.

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