Sampyo Group Chairman’s Trial Over ‘Eldest Son’s Unfair Support’: Prosecution and Defense Dispute Project’s Nature

“Included Succession Matters” vs “Primarily Aimed at Business Structure Efficiency”
Witness: “I Gave Routine Answers Based Solely on the Materials Presented”

During the trial of Jung Dowon, Chairman of Sampyo Group, and former Sampyo Industry CEO Hong Sungwon, who have been indicted on charges of raising succession funds through unfair support to affiliates, the objectivity of the prosecution's investigation was criticized by the defendants’ side.

Jung Dowon, Chairman of Sampyo Group. Photo by Yonhap News

On May 20, the 24th Criminal Division of the Seoul Central District Court (Presiding Judge Lee Youngsun) held a hearing for Chairman Jung and former CEO Hong, who are charged under the Act on the Aggravated Punishment of Specific Economic Crimes and the Monopoly Regulation and Fair Trade Act. The prosecution conducted witness questioning of former Sampyo President Lee. The prosecution pressed Chairman Jung on intentionality, citing statements from Lee’s prior interrogation records in which Lee commented that the group’s efficiency project “appeared to be for succession work” or “seemed to include succession-related matters.”

However, testifying in court, former President Lee explained the circumstances of his previous statements to the prosecutors, citing the limits of his work responsibilities. He emphasized that when he joined Sampyo Group, his primary task was to resolve liquidity issues that arose after the acquisition of the cement business, and that he was in charge of finance, accounting, and treasury. He stated that he was not responsible for specific sales or production operations in the ready-mix concrete business and was therefore not familiar with those areas.

In particular, when questioned by the prosecution about discrepancies between his statements during the investigation and his testimony in court, Lee explained, “During the investigation, the prosecutor only showed me fragmentary materials on matters I did not know well and asked for my thoughts,” and added, “I simply answered in general terms based on what was shown, giving routine responses.”

Chairman Jung’s defense attorney, during cross-examination, criticized the investigation methods by presenting the full original documents and their original sequencing, which had not been provided to the witness during the prosecution’s investigation. The defense highlighted that the cover of the business plan explicitly stated “Business Structure Efficiency,” and that the document’s stated purpose was to provide direction for optimizing the group’s business portfolio. The defense also pointed out that the work plan section of the document included the phrase “business-oriented restructuring plan.”

Upon reviewing the document’s overall context, former President Lee testified that the project “appeared to be primarily aimed at improving business structure efficiency.” He further stated that the legal risks scheduled for review during the project were “major issues handled for the purpose of ensuring legal compliance,” and asserted that he understood the project as not being intended to harm other affiliates or to enable illegitimate practices.

Previously, Chairman Jung was accused of conspiring with former CEO Hong to provide approximately 7.4 billion won in unfair support by purchasing powder from SP Nature—where his eldest son, Jung Daehyun, Senior Vice Chairman of Sampyo Group, is the largest shareholder—at prices 4% higher than market rates from 2016 to 2019. The prosecution classified this not as a simple internal transaction but as a structural scheme to enhance the value of the son’s company and alter the group’s shareholding structure for the purpose of management succession, thereby bringing them to trial.

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