Jo Hyeon-beom (Chairman) Sentenced to Two Years in Prison Confirmed… Korea & Company, 'Owner Risk' Becomes Reality

*This content was translated by AI.

Korea & Company Group's Jo Hyeon-beom (Chairman) has ultimately received a confirmed prison sentence from the Supreme Court. As the long-standing legal risks culminated in the worst-case scenario of "absence of the chairman," a management vacuum within the group and an inevitable decline in external credibility are anticipated. In particular, this verdict sends a significant message to the business community by reaffirming the court's strict stance on private overreach by chaebol chairmen.

Supreme Court Confirms Two-Year Prison Sentence in Lower Court Ruling… Court: "Use of Company Funds for Private Purposes Is Clear"

According to legal circles on the 8th, the First Division of the Supreme Court (presided over by Justice Ma Yong-ju) confirmed the lower court's ruling sentencing Jo Hyeon-beom (Chairman) to two years in prison in the appeal trial regarding charges of violating the Act on Aggravated Punishment of Specific Economic Crimes, among others (embezzlement and breach of trust).

The core of this trial was how much company money Jo (Chairman) misappropriated for personal use by leveraging his position. Of the total 20.7 billion won in embezzlement and breach of trust charges filed by the Prosecution Service, the court ultimately recognized approximately 2 billion won as guilty.

Examining the specific items confirmed as guilty reveals the typical "moral hazard" of the owner's family. The court ruled guilty on points including Jo (Chairman) paying for moving costs and furniture purchases for his private residence using funds from affiliated companies, and paying the salary of a personal driver assigned exclusively to his spouse regardless of company duties. Additionally, the regular private use of company-owned foreign cars worth hundreds of millions of won was also included under the categories of breach of trust and embezzlement.

The court stated, "The defendant used corporate funds as if they were personal funds to gain private benefits, an act that hinders sound corporate management and infringes upon shareholders' interests," and rejected the appeal.

Despite Some Core Charges Being Acquitted, Prison Sentence Confirmed

The side of Jo (Chairman) expressed grievances regarding certain charges during the trial but failed to overturn the Supreme Court's judgment. However, as with the first and second instances, a significant portion of the breach of trust charges related to improper support for affiliated companies (such as Korea Precision Machinery), one of the core allegations raised by the Prosecution Service, was maintained as not guilty due to insufficient evidence.

Nevertheless, given that the amount used for private purposes was substantial and acts lacking the sense of responsibility expected of a group chairman were clearly proven, a two-year prison sentence became unavoidable. Consequently, Jo (Chairman) will serve the remainder of his sentence in prison, continuing his life behind bars.

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*This content was translated by AI.