Hyosung’s sibling feud continues with second son in court on trial

It all began in July 2014 when Cho Hyun-joon, currently the Hyosung Group chairman, was sued by his younger brother Cho Hyun-moon on charges of embezzlement and breach of trust – a harbinger of what came to be known in South Korea as the Hyosung brothers’ feud.

And then came the counterattack. In March 2017, the chairman filed a lawsuit against his younger brother on charges of attempted coercion and threats.

The chairman claimed that Cho Hyun-moon threatened to pass on evidence of the chairman’s and others’ wrongdoings to prosecutors unless he bought the younger brother’s unlisted stocks at a high price. Cho Hyun-moon was indicted afterwards.

“All my efforts to make Hyosung a transparent company have been dismissed as false accusations,” Cho Hyun-moon, a former vice president of Hyosung Group, said on Wednesday as he showed up at the Seoul Central District Court for trial.

“The chairman and his confidants have for years persecuted me to conceal their wrongdoings and corruption. Their suit against me is a retaliation. All I did was advise them against committing a crime; I don’t know if that is a crime.”

Chairman Cho Hyun-joon denies the accusations filed against him by his younger brother.

Cho Hyun-moon also denies the accusations against him. He claims that the charges were from an incident in 2013, so the statute of limitations “has long since passed.”

SIBLING FEUD

The three sons of former Hyosung Group Chairman Cho Suck-rai – the eldest Cho Hyun-joon, the second Cho Hyun-moon and the youngest Cho Hyun-sang – have been involved in a power struggle for control of the textile and chemicals conglomerate since 2014.

Back in July 2014, the second son asked prosecutors to investigate Trinity Asset Management and Shin Dong Jin Corp., claiming that executives of the two companies were involved in embezzlement, which cost the companies more than 10 billion won ($7.5 million) in losses.

Cho Hyun-joon and Cho Hyun-sang were the largest shareholders of Trinity Asset and Shin Dong Jin, respectively.

The plaintiff, Cho Hyun-moon, left Hyosung early that year, saying that the group’s management philosophy wasn't aligned with his personal beliefs.

Since his departure, Hyosung Group has been engulfed in a series of investigations by prosecutors and the National Tax Service, which also led to the indictment of their father Cho Suck-rai for tax evasion and embezzlement.

The current Hyosung chairman, Cho Hyun-joon, a grandson of the late Hyosung founder Cho Hong-je, took over the helm of the conglomerate from his father Cho Suck-rai in 2017.

As Korea’s 24th-largest conglomerate in terms of assets, Hyosung owns more than 50 affiliates, with its businesses stretching from textiles, chemicals and trading to heavy industries and construction.

Write to Jin-Seong Kim at jskim1028@hankyung.com

In-Soo Nam edited this article.