Hancom on Chairman Kim Sang-cheol's Arrest Warrant: "Apologies for Concern... No Involvement by Management"

Regarding the police's request for an arrest warrant for Kim Sang-cheol, chairman of Hancom, on suspicion of slush fund creation, Hancom stated on the 11th, "We deeply apologize for causing concern to many stakeholders."

In a statement issued under the names of co-CEOs Byun Sung-jun and Kim Yeon-su, Hancom clarified, "We would like to once again clearly state that Hancom and the company's management were not involved in the relevant business at all."

Earlier, the Anti-Corruption and Economic Crime Investigation Unit of the Gyeonggi Southern Provincial Police Agency applied for a pre-arrest warrant at the end of last month against Chairman Kim, who was booked on charges of breach of trust under the Act on the Aggravated Punishment of Specific Economic Crimes. Kim is suspected of leading the entire case involving the creation of slush funds through Arowana Token.

Hancom With, a blockchain-specialized company affiliated with the Hancom Group, made an equity investment in Arowana Token. A virtual asset management company, Arowana Tech, acquired with funds from the Hancom Group, issued a total of 500 million Arowana Tokens and promoted them as virtual assets usable on six major digital financial business platforms.

Although Arowana Token has since been delisted, on April 20, 2021, just 30 minutes after its initial listing, its price surged from the initial trading price of 50 won to 53,800 won, a 107,500% increase, raising suspicions of market manipulation.

Additionally, allegations have been raised that Chairman Kim created nearly 10 billion won in slush funds using Arowana Token. In October 2022, the police accelerated their investigation by conducting raids on the Hancom Group chairman's office, Hancom With headquarters, and Kim's residence.

Hancom stated, "Hancom and each group company are already managed under the leadership of their CEOs, and there will be no issues or impact on actual management," adding, "All executives of the Hancom Group will thoroughly inspect each company based on a strong sense of responsibility toward Hancom and the group companies to minimize additional risks."

They continued, "We are currently implementing plans to transform Hancom With from a security company into a financial company," and explained, "We are reorganizing the management environment of Hancom With, which is at the top of the group's governance structure. Byun Sung-jun and Kim Yeon-su have volunteered as new inside directors of Hancom With, and subsequently, CEO Byun Sung-jun will serve as co-CEO of Hancom With to oversee the entire group’s operations, aiming to simplify the group's governance structure and ensure sound management."

Hancom also pledged, "We will proceed with the ongoing plans and goals without disruption to meet the expectations of many stakeholders and achieve successful results, and regardless of any future changes related to the current legal issues, the company's official stance will remain unchanged."

Meanwhile, on the same day, the Criminal Division 1 of the Suwon District Court Seongnam Branch (Presiding Judge Heo Yong-gu) sentenced Kim Mo (35), the second son of Chairman Kim and an inside director of Hancom With, and Jung Mo (48), CEO of the virtual asset management company Arowana Tech, to three years and two years and six months in prison, respectively, on charges including breach of trust under the Act on the Aggravated Punishment of Specific Economic Crimes.

Kim and Jung are accused of requesting a domestic virtual asset consulting firm to sell approximately 14,571,000 Arowana Tokens from December 2021 to June 2022, and after deducting fees, receiving settlement payments worth about 8.03 billion won in Ethereum and Bitcoin transferred to Kim's personal electronic wallet to create slush funds.

They are also accused of requesting an overseas virtual asset-related operator to manage and sell 4 million Arowana Tokens and receiving virtual assets worth approximately 1.57 billion won in operating profits transferred to Kim's personal electronic wallet.

The prosecution determined that the slush funds amounted to about 9.6 billion won and were used personally for stock purchases, credit card payments, and department store merchandise purchases.

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