CJ Group Chairman Lee Convicted of Embezzlement and Tax Evasion
CJ Group Chairman Lee Jay Hyun was found guilty of embezzlement, breach of fiduciary duty and tax evasion, a South Korean court said today.
Lee, 53, head of South Korea’s 14th-biggest conglomerate whose businesses include food making, media and entertainment, was sentenced to four years in prison, according to a faxed statement from the Seoul Central District Court. The court also fined him 26 billion won ($24 million).
Lee won’t go directly to jail as the court allowed him to remain hospitalized as he recovers from a kidney transplant operation in August, according to the statement.
President Park Geun Hye has pledged to crack down on tax evasion to help fund increased welfare spending, and the country’s tax agency began 23 separate investigations in May. The government has targeted the heads of South Korea’s family-run conglomerates, known as chaebol, for tax evasion and embezzlement in recent years, including Samsung Group and Hyundai Group, the country’s two biggest.
Lee was found guilty of embezzling 60.4 billion won from CJ Corp. (001040) to create slush funds, the court said. He also caused damage to CJ Group’s Japan unit by making it provide guarantees for personal property purchases in Japan, the court found.
Lee plans to appeal today’s ruling to a higher court, his attorney Ahn Jeong Ho said in a phone text message.
CJ Group has no comment on today’s ruling, according to an official at the company’s press office who asked not to be named, citing company policy.
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