Prosecutors Conduct Search and Seizure at Geukdong Yuhwa CEO over Alleged Unfair Transactions with Hankook Tire

by Kim HyeongMin

Published 17 Apr.2023 15:30(KST)

The prosecution investigating allegations of unfair transactions between Hankook Tire & Technology (Hankook Tire) and Uam Construction has detected additional corruption charges against Jang Seon-woo, CEO of Geukdong Yuhwa and founder of Uam Construction, and has launched a forced investigation.

Prosecutor's Office [Image source=Yonhap News]

According to the legal community on the 17th, the Fair Trade Investigation Division of the Seoul Central District Prosecutors' Office (Chief Prosecutor Lee Jeong-seop) sent prosecutors and investigators to four to five locations, including Jang's residence and affiliated company offices in Hannam-dong, Yongsan-gu, Seoul, to secure necessary materials.

During the investigation into allegations that Cho Hyun-beom, chairman of Hankook Tire, awarded construction projects to Uam Construction and received kickbacks, the prosecution reportedly uncovered clues of personal corruption such as breach of trust and embezzlement by CEO Jang, leading to the search and seizure operation.

Uam Construction was established by CEO Jang in 2010. Based on the friendship between CEO Jang and Chairman Cho, the company won contracts for the third expansion of Hankook Tire's Hungary factory in 2013 and the construction of the Hankook Tire R&D center, 'Hankook Tire Technodome,' in 2014. In particular, the prosecution suspects that there were unfair transactions involved in Uam Construction's participation in the Technodome project. Uam Construction, which had a low ranking in construction capability evaluations and only obtained a civil engineering and architectural construction license in 2015 after the project had already started, was selected as the contractor for the 266.4 billion won project under suspicious circumstances. It is believed that they paid hundreds of billions of won in construction fees as kickbacks to Chairman Cho.