Prosecutors to summon SK Group Chairman Chey

Prosecutors will summon for questioning Monday SK Group Chairman Chey Tae-won on whether he embezzled money from his conglomerate.

The Seoul Central District Prosecutors` Office said Friday, "We notified Chairman Chey to appear at the prosecutors’ office at 9:30 a.m. Monday." Chey has been subpoenaed for the first time since February 2003.

The chairman, 51, is suspected of embezzling 49.7 billion won (43 million U.S. dollars) of 280 billion won (240 million dollars) invested by SK affiliates in Benex Investment, a venture capital fund, and spearheading misappropriation of the fund to invest in derivatives products through money laundering.

Prosecutors say Chey colluded in the process with Kim Hong-won, 50, former adviser to SK Shipping who went abroad early this year and is staying in China; Chey Jae-won, 48, senior vice chairman of SK Shipping; and Kim Joon-hong, 46, the Benex president who has been arrested.

People in and outside the prosecution judge that Chey will face similar charges to those against Kim, who is the first to be arrested among those implicated in the case. According to the indictment, Kim funneled 49.5 billion won (43 million dollars) in funds deposited for investment in another fund, which was to be raised with investments from SK E&S, SK Gas and Busan City Gas to appropriate the funds he embezzled.

To refinance investments in the fund, he provided 22 billion won (19 million dollars) in Benex funds as collateral and borrowed 76.8 billion won (66 million dollars) from savings banks, including 22.1 billion won (19 million dollars) borrowed in the name of Vice Chairman Chey.

Prosecutors will determine the level of punishment against the Chey brothers after finishing questioning of Chairman Chey. The biggest issue of interest among people in and outside the prosecution is if an arrest warrant will be sought for Chairman Chey.

In 2003, Chey Tae-won was indicted and arrested on charges of falsifying financial sheets to the tune of 1.5 trillion won (1.29 billion dollars) and other offenses while chairman of SK Corp. He was given a prison term of three years with a five-year stay of execution by the Supreme Court in 2008, and was given amnesty in August that year.

verso@donga.com