Prosecutors Indict Shinpung Pharmaceutical CEO Jang Won-jun for Creating 9.1 Billion Won Slush Fund
The prosecution has indicted Jang Won-jun, president of Shinpung Pharmaceutical, and the corporation on charges of embezzling 9.1 billion KRW by creating slush funds.
The Criminal Division 7 of the Seoul Central District Prosecutors' Office (Chief Prosecutor Kim Hyung-seok) has indicted President Jang and Shinpung Pharmaceutical without detention on charges of embezzlement under the Act on the Aggravated Punishment of Specific Economic Crimes. Earlier, the company's former executive director, Noh (70), who was an accomplice, was arrested and indicted in December last year.
They are accused of creating slush funds from April 2008 to September 2017 by inflating raw material delivery prices or fabricating transactions to receive the difference back, and using the funds for acquiring company stocks and living expenses. They are also charged with falsifying Shinpung Pharmaceutical’s financial statements during the slush fund creation process from 2016 to 2018 and disclosing them, violating the External Audit Act.
In May last year, the police transferred some crimes, including Noh’s embezzlement of 5.7 billion KRW, to the prosecution. However, the prosecution found the investigation insufficient and requested a reinvestigation, receiving the case and conducting supplementary investigations directly.
As a result, besides the charges transferred by the police, an additional 3.4 billion KRW in slush funds was discovered, and it was confirmed that President Jang was deeply involved in the creation process.
The prosecution also indicted without detention Lee (66), the head of an unregistered lending business who helped convert promissory notes brought by former executive director Noh into cash and assisted in creating the slush funds, along with the lending company, on charges including violation of the Loan Business Act.
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Seo (51), a director of a supplier company, and Yang (59), a tax accountant, who extorted a total of 5.074 billion KRW from former executive director Noh between 2019 and 2022 by threatening to expose the slush fund creation?receiving 500 million KRW in checks, 250 million KRW in cash from Shinpung Pharmaceutical, and over 4.3 billion KRW in delivery payments?were arrested and indicted last October on charges of blackmail under the Act on the Aggravated Punishment of Specific Economic Crimes.
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