Prosecutors Seek Arrest Warrant for Ewha Group Chairman on Hundreds of Billions Embezzlement and Breach of Trust Charges

The prosecution investigating allegations of slush funds and tax evasion within Ewha Group has filed arrest warrants against the group's management.

Prosecutors [Photo by Yonhap News]

According to the legal community on the 10th, the Tax Crime Investigation Division of the Seoul Central District Prosecutors' Office (Chief Prosecutor Min Kyung-ho) filed arrest warrants on the 8th against Ewha Group Chairman Kim Young-kwon and General Manager Kim Sung-kyu on charges including violation of the Act on the Aggravated Punishment of Specific Economic Crimes and the Capital Markets Act.

The pre-arrest detention hearing for Chairman Kim and General Manager Kim will be held on the 11th at 10:30 a.m. at the Seoul Central District Court, presided over by Judge Yoon Jae-nam, who is in charge of warrants.

They are accused of embezzling 11.4 billion KRW in slush funds under the guise of salaries from 2012 to this year (embezzlement under the Act on the Aggravated Punishment of Specific Economic Crimes). They are also charged with violating the Capital Markets Act and breach of trust under the same Act by reselling shares of affiliates such as Ewha Electric Industry, which they purchased at low prices between 2015 and 2017, at inflated prices through false disclosures, thereby gaining approximately 12.4 billion KRW in illicit profits and causing the company a loss of 18.7 billion KRW.

The prosecution also determined that Chairman Kim and others failed to pay 1.2 billion KRW in gift and capital gains taxes during securities transactions in 2016 and 2017, and did not report overseas investments from 2016 to 2019, resulting in the outflow of assets worth approximately 17.3 billion KRW abroad. They have been charged with tax evasion and concealment of assets abroad under the Act on the Aggravated Punishment of Specific Economic Crimes.

Earlier, the Seoul Regional Tax Office confirmed allegations that Ewha Group evaded gift taxes during transactions with related parties around 2016 and 2017 and reported the case to the prosecution.

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