Prosecutors Investigate Cho Hyun-beom, Chairman of Hankook Tire, for 'Preferential Contracting and Embezzlement'

The prosecution is investigating Cho Hyun-beom, chairman of Hankook Tire & Technology (Hankook Tire), on the 27th as a suspect over allegations of unfair support to affiliates and embezzlement.

The Fair Trade Investigation Division of the Seoul Central District Prosecutors' Office (Chief Prosecutor Lee Jeong-seop) summoned Chairman Cho as a suspect for the first time on this day. Previously, Chairman Cho was questioned once by the prosecution in December last year as a witness.

[Image source=Yonhap News]

Chairman Cho is suspected of being involved in unfairly supporting the affiliate Hankook Precision Works (MKT) by having Hankook Tire purchase tire molds from MKT at prices higher than other manufacturers between 2014 and 2017.

The prosecution suspects that the profits funneled to MKT by Hankook Tire flowed into the hands of Chairman Cho and his family. MKT is owned 50.1% by Hankook Tire, 29.9% by Chairman Cho, and 20.0% by Cho Hyun-sik, advisor of Hankook & Company. Between 2016 and 2017, dividends totaling 10.8 billion KRW were paid, including 6.5 billion KRW to Chairman Cho and 4.3 billion KRW to Advisor Cho.

Separately, the prosecution is also investigating Chairman Cho on charges of embezzlement and breach of trust. He is suspected of improperly lending about 13 billion KRW of MKT funds to Park Ji-hoon, CEO of Rihan, a partner company of Hyundai Motor. The core allegation is that despite knowing Rihan’s poor financial condition, he lent the funds, causing losses to the company.

The prosecution is calculating the amount of breach of trust, viewing that Chairman Cho lent company money due to a personal friendship with CEO Park.

Chairman Cho is also suspected of using tens of billions of company funds for personal home repairs and purchasing foreign luxury cars.

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