SEOUL: Chey Tae-won, the chairman of South Korea’s biggest oil refiner, SK Corp, was sentenced to three years in jail yesterday for his part in a US$1.2bil accounting fraud.
SK Group chairman Son Kil-seung was also found guilty of a similar offence and sentenced to a suspended three-year jail term. Eight other executives were given suspended sentences of between one-and-a-half and three years.
The sentences, handed down by a judge at the Seoul District Court, came amid President Roh Moo-hyun's on-going drive to weed out corruption at South Korea's top conglomerates, or chaebols, whose business practices were blamed for the country’s 1997 financial crisis.
Chey, who is also vice-chairman of the SK Group, South Korea’s fourth largest conglomerate, was found guilty of accounting fraud at the group’s trading arm, SK Global Co, and illegal stock dealing.
The judge described Chey, who appeared in court in a light blue prison uniform, as the practical head of the SK Group.
SK Global is on the verge of bankruptcy after the US$1.2bil accounting fraud – one of the biggest ever in the country – was unearthed in March, sending shock waves through financial markets.
A SK Group spokesman said the group was shocked by Chey’s jail sentence and was considering an appeal.
SK Group and other chaebols were a symbol of South Korea’s rapid rise from poverty into a global industrial powerhouse, but the mountains of debt they amassed also helped bring the country to its knees during the financial crisis.
Since the crisis, South Korea has seen a string of top executives from business groups such as Daewoo Group and Hanbo Steel jailed on corruption charges. The latest crackdown coincides with similar corporate scandals in the United States at Enron Corp and Tyco International Ltd. – Reuters