Prosecutors Summon Cho Hyun-beom, Chairman of Hankook Tire, Over 'Unfair Support to Affiliates'
[Asia Economy Reporter Kim Hyung-min] The prosecution investigating the unfair support case involving Korea Tire & Technology (hereinafter Korea Tire) has summoned and is questioning Cho Hyun-beom, chairman of the Korea Tire Group.
The Fair Trade Investigation Division of the Seoul Central District Prosecutors' Office (Chief Prosecutor Lee Jeong-seop) summoned Chairman Cho on the morning of the 23rd.
Korea Tire is suspected of unfairly supporting its affiliate Korea Precision Works (MKT) by purchasing tire molds manufactured by MKT at prices higher than other manufacturers from February 2014 to December 2017. During this period, MKT recorded sales of 87.52 billion KRW, gross profit of 37.02 billion KRW, and operating profit of 32.37 billion KRW. MKT's gross profit margin reached 42.2%, which was 12.6 percentage points higher than its competitors.
Previously, the Fair Trade Commission, which investigated the unfair support suspicions against Korea Tire, judged that the profits from the unfair support flowed to the Korea Tire founding family. MKT paid dividends totaling 10.8 billion KRW to Chairman Cho Hyun-beom (6.5 billion KRW) and Advisor Cho Hyun-sik (4.3 billion KRW) from 2016 to 2017.
On the 24th of last month, the prosecution conducted a search and seizure of three Korea Tire Group affiliates?Korea Tire, holding company Korea & Company, and MKT?as well as one related company.
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Following the analysis of seized materials, the prosecution plans to verify whether Chairman Cho and other founding family members directed or were involved based on the results of the summons investigation on this day. If specific involvement of Chairman Cho is confirmed, the prosecution is expected to exercise its right to request prosecution. The Fair Trade Commission holds exclusive prosecution rights for violations of the Fair Trade Act.
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