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Formula for chaebol criminal offenses and punishment

  • PUBLISHED :March 21, 2017 - 14:40
  • UPDATED :March 21, 2017 - 14:40
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[THE INVESTOR] Lotte Group’s founding family is the latest chaebol family in a legal soup, but it is not surprising as Koreans have seem many leaders of major conglomerates being prosecuted before.

While chaebol families suspected of wrongdoings face the same procedures as everyone else, there appears to be a certain very specific formula that applies to such cases. 


(From left) Lotte Group founder Shin Kyuk-ho, son and Chairman Shin Dong-bin, elder son Shin Dong-joo and his common-law wife Seo Mi-kyung appear at a prosecutors' office in Seoul on March 20.


The formula begins with an investigation without detention, which leads to a three-year jail term suspended for five years if convicted, followed by a presidential pardon.

The case of Hyundai Motor Group Chairman Chung Mong-koo’s embezzlement case in the mid-2000s is one of the more high profile cases that played out according to the formula.

Chung was convicted of embezzling millions of dollars from Hyundai Motor Group companies, and was initially sentenced for three years. However, a higher appeals court passed down a three-year term suspended for five years, with 300 hours of community service in 2007.

Moreover, in 2008 he was pardoned by then President Lee Myung-bak.

The same scenario was played out regarding Samsung Electronics Chairman Lee Kun-hee in 2008 and 2009.

Following an independent counsel investigation into Samsung Group, Lee was given the exact same sentence as Chung in 2009. Four months later, Lee was pardoned, again by the president.

It was Lee’s second brush with the law that ended with a presidential pardon. In 1995, he was given a two-year sentence suspended for three years for his involvement in illegal funds to former President Roh Tae-woo, and was pardoned in 1997.

In addition to Chung and Lee, Park Yong-sung and Park Yong-oh of Doosan Group, former SK Group chief Sohn Kil-seung and SK Group Chairman Chey Tae-won have all been given the same sentence, and later pardoned.

By Choi He-suk (cheesuk@heraldcorp.com)
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