Chairman of Ssangyong Cement Industrial Corp arrested

The Supreme Public Prosecutors’ Office on Monday arrested Kim Suk-won, honorary chairman of Ssangyong Cement Industrial Corp. on charges of embezzlement.  Kim allegedly embezzled 30 billion won of company funds from Ssangyong Group’s subsidiaries during the firms’ restructuring in 1998-2000 when he was the chairman of the group. He is also suspected of hiding the company’s real estate worth 5 billion won by using another person’s name to avoid creditors’ demands for his debt guarantees for the financially troubled group.

In addition, Kim is suspected of causing 5.4 billion losses by selling 400,000 shares of a Ssangyong affiliate to Ssangyong Cement at inflated prices, while incurring losses of 17.8 billion won by transferring the money to another subsidiary in a bid to prevent creditors from disposing of his stocks, which were collateralized for bank loans.  The prosecution said it is tracing the flow of the 30 billion won, adding the money is not likely to have been used for lobbies to politicians.

Upon his arrest, Ssangyong employees were reportedly shocked, as Kim has been praised that he sacrificed for the company to help the company pay back its debts even by granting his portion of company stocks to the firm for free. Kim, who led Ssangyong Group from 1975-95, entered into politics as a lawmaker in 1996, and came back to the business as Ssangyong Cement chairman.