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By Kim Rahn
The second born son of Hyosung Group Chairman Cho Suck-rai has asked the prosecution to investigate two suspected cases of embezzlement and breach of trust involving his elder brother, prosecutors said Thursday.
This is the second complaint filed by Cho Hyun-moon, a lawyer, against one of his siblings, reflecting deepening discord within the family regarding a transition of power.
According to the Seoul Central Prosecutors' Office, Cho filed the complaint against his elder brother, the group's President Cho Hyun-joon, and seven former and incumbent executives for suspected breach of trust and embezzlement of company funds.
Cho Hyun-moon claimed that President Cho, who has shares in Nautilus Hyosung, Galaxia Electronics and Hyosung Information Systems, invested money in deals unrelated to the firms' profits and bought stocks in the firms at prices that were higher than the market rate.
"President Cho inflicted tens of billions of won in losses on the companies by conducting such suspicious deals. Executives of the affiliates helped him make the deals," he stated in the complaint.
Hyosung officials responded that it was regrettable that the complaint had been filed against the company that Cho had previously worked for, along with its executives, including his brother.
"Many parts of the complaints differ from the facts. The investigation will find the truth," said a company spokesman.
Cho claimed that in 2011 when the group was changing its enterprise resource planning system, worth 50 billion won, he uncovered acts of corruption committed by several executives but the group did not take any punitive action against them.
After conflicts with group executives over the case, he left the group in September that year. In January this year, he sold all his stakes in Hyosung affiliates held by himself and his son, cutting ties with the group completely.
"I left the group to severe any connection with corruption and live a new life. But the group kept defaming me by spreading false rumors. It even attempted to frame me for corruption by forging documents," he stated in a press release, adding that he will not yield to Hyosung's mudslinging.
He submitted evidence for the corruption allegation along with the complaint, according to the prosecution.
"A company has a public responsibility. Specific individuals used company funds as if it was their private money, and such illegal acts should be rooted out. I hope this investigation can root out Hyosung's corruption and help develop Korea's businesses and capital market more transparently," he said.
Earlier in July, Cho filed a separate complaint with the prosecution against Choi Hyun-tae, who heads the group's two asset management affiliates, for embezzlement and breach of trust.
President Cho and the chairman's third son, Cho Hyun-sang, hold controlling stakes in the two affiliates, respectively, so the complaint was largely targeted at the two brothers, not Choi, group insiders say.
Meanwhile, Chairman Cho is on trial for allegedly evading paying 150 billion won in taxes and embezzling company funds.
