Hankook Tire chairman arrested for alleged embezzlement

The head of Hankook Tire & Technology Co., South Korea’s top tire maker, was arrested on Thursday on charges of embezzlement, breach of trust and violation of the Fair Trade Act.

The Seoul Central District Court granted a warrant to arrest Hankook Chairman Cho Hyun-bum, who allegedly spent some 20 billion won ($15.1 million) of the company’s money for personal purposes and unfairly supported a group affiliate, citing concerns he could destroy evidence.

Prosecutors suspected him of using the money to buy luxury imported cars and pay acquaintances for house repairs.

Cho was accused of unfairly supporting Hankook Precision Works Co. by purchasing tire molds at higher prices than market levels from 2014 to 2017.

The company, in which Cho and his elder brother have a 29.9% stake and a 20% stake, respectively, reported higher sales during the period. The chairman and his brother reportedly received dividends of 10.8 billion won in 2016 and 2017 combined, causing prosecutors to believe the owner’s family carried out the deal for its own profit.

Cho was also suspected of inflicting financial losses on Hankook Precision Works by lending 10 billion won of the company’s money to Leehan Corp. due to his personal relationship with its CEO despite the poor financial conditions of the Hyundai Motor Co. automobile parts maker. 

Write to Hyun-Ah Oh at 5hyun@hankyung.com
 

Jongwoo Cheon edited this article.