2 Kumho brothers may make up

January 19, 2014 Leave a comment

2014-01-16 17:47

2 Kumho brothers may make up

Korea Kumho Petrochemical Company (KKPC), a major supplier of synthetic rubbers and specialty chemicals, said Thursday it accepted a decision by a Seoul court that imposed a four-year suspended jail term on the company’s chairman.Park Chan-koo, 66, had been waiting for a verdict after the prosecution demanded a seven-year prison term on charges of embezzlement, breach of trust and insider trading in December, 2013.
In a statement, the Seoul Southern District Court said Park was guilty of breach of trust, but wasn’t guilty of direct involvement in embezzlement and insider trading.
The court said Park had used money belonging to a KKPC affiliate inappropriately, but added that the company did not incur any actual losses as the funds were entirely reimbursed by his son, Park Joon-kyung, an executive at KKPC.
It also said that there was a lack of evidence supporting charges the chairman sold 2.62 million common shares of Kumho Industrial, a de-facto holding company of Kumho Asiana Group, using classified insider information in June 2009 before the group’s announcement of it selling Daewoo E&C. Kumho Asiana Group is owned by Chan-koo’s older brother, Park Sam-koo
“KKPC welcomes the court decision. However, we are sorry that some of the charges were found not to have merit. But KKPC respects the decision. The court has been consistent in handling issues based on fairness,” spokesman Chang Yun-seok said.
The spokesman said the company plans to appeal the guilty verdict to a higher court.
In June 2008, Daewoo E&C was exposed to a liquidity crisis a year after the KKPC chairman started selling his stake in Kumho Industrial and buying shares of KKPC to separate from Kumho Asiana Group.
On Dec. 30, 2009, Kumho Asiana Group entered a court receivership program led by the main creditor, the Korea Development Bank (KDB).
In 2010, creditors decided to separate KKPC from the Kumho Group. In April 2011, prosecutors raided the headquarters of KKPC over allegations the KKPC chairman was creating a slush fund.

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