Prosecutors Seek Arrest Warrant for Kim Seong-hoon, Former CEO of Baekgwang Industry, in 'Trapung' Case

The prosecution investigating allegations of embezzlement worth around 20 billion KRW at Baekgwang Industry, the manufacturer of the clogged sewer pipe cleaner 'Traffeng,' filed an arrest warrant for former CEO and largest shareholder Kim Seong-hoon on the 17th.

Seoul Central District Prosecutors' Office, Seocho-gu, Seoul. Photo by Jinhyung Kang aymsdream@

The Fair Trade Investigation Division of the Seoul Central District Prosecutors' Office (Chief Prosecutor Lee Jeong-seop) announced that they filed an arrest warrant against former CEO Kim on charges including embezzlement under the Act on the Aggravated Punishment of Specific Economic Crimes.

Former CEO Kim is suspected of using Baekgwang Industry’s company funds from 2010 until this year for personal and family credit card payments and tax payments. The prosecution estimates that the embezzled company funds amount to approximately 20 billion KRW.

To conceal these crimes, he is also accused of falsely recording the money embezzled between 2017 and 2020 as loans to a related company, Company A, and misrepresenting the amount as debt in disclosures, violating the External Audit Act and the Capital Markets Act.

The prosecution also applied charges of instructing evidence destruction, as they found circumstances indicating that in 2020, Kim ordered accounting officer Park to shred accounting documents detailing the specific cash flow of the embezzled funds.

Earlier, in July last year, the Financial Supervisory Service handed over reference materials to the prosecution suspecting embezzlement and false disclosures at Baekgwang Industry. The Securities and Futures Commission of the Financial Services Commission also sanctioned Baekgwang Industry for preparing and disclosing financial statements in violation of accounting standards and reported the case to the prosecution. As of last month, former CEO Kim was the largest shareholder holding 22.64% of Baekgwang Industry’s shares and stepped down as CEO in March.

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