SK Holdings co-CEO suspected of embezzling W265 bln

Chey Jae-won, the co-chief executive of SK Holdings, is suspected of embezzling 265 billion won (237 million U.S. dollars) from five SK Group affiliates to raise his personal funds by investing in futures, prosecutors said Tuesday.

Chey allegedly sent the embezzled amount to Kim Won-hong, a former adviser to SK Shipping, to invest in futures and also evaded gift taxes. Prosecutors, however, are known to have failed to get circumstantial evidence that Chey’s older brother, SK Holdings and SK Group Chairman Chey Tae-won, was involved in the embezzlement.

An investigative team of the Seoul Central Prosecutors` Office raided SK Holdings` headquarters in central Seoul and other SK Group affiliates from 6:30 a.m. Tuesday to secure evidence against Chey Jae-won.

SK Group affiliates raided by prosecutors included SK Gas and SK E&S, SK Telecom, and SK C&C. Prosecutors also raided Benex Investment, which invested the embezzled money in futures on Chey Jae-won’s behalf.

Prosecutors and police officers deployed in the massive raid seized accounting books and financial transaction data to identify how Chey Jae-won embezzled funds from five SK Group affiliates.

Prosecutors planned to raid the residences of Chey Jae-won and his older brother and search their cars, but failed to obtain a court warrant.

Other investigators are known to have raided the headquarters of SK Telecom and the Seoul Regional Tax Office under the suspicion that Lee Hee-wan, an investigation director of the tax office, took bribes in return for helping SK Group affiliates in tax audits.

Prosecutors said Lee accepted 3.1 billion won (2.8 million dollars) in bribes from a former SK Networks executive from 2006 through June this year in return for covering up the results of tax audits of SK Energy and SK Telecom. Lee is also alleged to have helped the companies while serving as a department head at the Seoul Regional Tax Office’s investigation bureau in 2005.

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