Hyosung Group Accused of Creating Secret Slush Funds

kpride, Sept. 14, 2015, 8:13 a.m.

After an in-depth investigation program from a Seoul-based terrestrial TV channel revealed circumstantial proof that the owner of Hyosung Group created secret funds, the company denied the allegations and threatened the TV channel by taking legal action. On September 12, SBS TV’s hit investigative reporting program “I Want to Know That” reported about a “ghost employee” of a Korean company, who never went to work but still received a monthly salary.

The staff of the program interviewed the employee, and he said, “At a casual meeting with my acquaintances, the boss proposed that I work together with him. I felt that it sounded good and gave him my resume and a bank account for the payment.” But he did not go to work. He just met the boss for a while, and had meals together. “After that, monthly wages were sent to my bank account, but they retrieved the money. I know that it is one of the typical ways of creating a slush fund.”

The program revealed that the company was Hyosung Corporation, one of the major business groups in Korea, and the boss was its president, Cho Hyun-joon. In addition, Cho ran several paper companies and managed a jewelry business in Hong Kong with support from Hyosung. However, the profits from the business were unaccounted for. Moreover, he managed an artwork fund, but lost almost all the money and the company was saddled with the loss, hinting that he embezzled company money.

However, Hyosung denied all of the allegations raised by the reporting program, and will take legal action against SBS. In a statement released on September 13, Hyosung said, “Almost all of the allegations raised in the program are not based on facts, and were distorted by unilateral argument among the anonymous whistleblowers. The company dealt with all of the related circumstances according to the law, and they are not related to creating slush funds.”

“The investigative program should be made to abide by objectivity and fairness, but it created malicious reports based on false arguments. We are now preparing legal action against the program and the broadcasting company,” it said.

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