SK’s eldest brother Shin-won, who donated 13.2 billion won Confinement crisis due to suspicion of slush funds

Input 2021.02.16 11:00

Shin Young Won(69) SK networks (001740)The entire SK Group is tense as the chairman is on the verge of an arrest investigation on charges of raising a slush fund of 20 billion won. This is because if Chairman Choi is arrested, it could adversely affect the management of SK Networks and the entire SK Group. Chairman Shin Shin-won is known as a’donation king’ who is the eldest brother of the beom SK family and usually makes a lot of donations.

According to business and legal affairs on the 16th, Judge Won Jeong-sook, the head of the warrant for the Seoul Central District Court, conducted a substantive examination of the warrant of arrest for Chairman Choi, who was convicted for violating the law on specific economic crimes (embezzlement) at 10 am on the 17th. I decided to open it. The previous day, the Seoul Central District Prosecutor’s Office, Division 1 of the Anti-Corruption Investigation (Director Jeon Joon-cheol), requested an arrest warrant for Chairman Choi.

Chairman Choi is accused of stealing money to raise billions of slush funds (embezzlement), and selling his company’s shares to his son-in-law at a bargain price in order to avoid the regulation to drive away work. The prosecution is reported to have investigated the suspicion of manipulating market prices, as SK Networks bought 100 billion won worth of treasury stock last year as an artificial stock price boost.

The investigation began when the Financial Information Analysis Institute (FIU) under the Financial Services Commission captured the suspicious flow of 20 billion won surrounding SK Networks in 2018 and handed over the related details to the prosecution. In October of last year, the prosecution confiscated the home of Chairman Choi and the office of SK Networks. On the 7th of last month, Chairman Choi was called as a suspect and investigated. Initially, the legal profession thought that the prosecution would conduct an additional investigation into Chairman Choi. However, it is the public opinion of the legal community that requesting an arrest warrant without further investigation means that he is confident in proving the charges.

Chairman Choi is the cousin of SK Group Chairman Choi Tae-won and the second son of the late Sunkyung Group Chairman Choi Jong-Geon, the founder of SK Group. Chairman Choi from 2000 to 2015 SKC(011790)He has been the chairman and chairman of SK networks from 2016.

Chairman Choi is also known as the “donation king” of the business world. Chairman Choi is a founding member of the’Honor Society’, a major donor club of over 100 million won, established by the Social Welfare Community Chest of Korea in 2007, and has been the chairman of the group since 2012. In 2019, he received the National Merit Camellia in recognition of his contribution of 13.2 billion won in personal money for 27 years. A business official said, “For a long time, he has been famous as a’donation king’, but many people who know Choi are surprised to hear that he is being investigated by the prosecution for such a suspicion.”

If Chairman Choi is arrested, it is expected that SK Networks’ management will be disrupted. SK Rent-a-Car and SK Magic, the core subsidiaries of the group, each have their own representative directors, but the group’s big issues are decided by Chairman Choi. Choi Seong-hwan, the eldest son of Chairman Choi, has not yet taken the lead in management. From the standpoint of SK Group, the detention of Chairman Choi, the eldest of the SK family, is a problem that could hurt external reliability.

On the 29th of last month, Chairman Choi disposed of 11,773 out of 41,811 shares of SK Corporation, lowering the stake to 0.04%. On the other hand, Sung-Hwan Choi, head of business, purchased SK shares on January 29th and February 1st, increasing the stake from 0.73% (52,977 shares) to 0.74% (52,6612 shares). With this in mind, the industry believes that Chairman Choi is to withdraw from the front line of management with the prosecution investigation in mind.

An investment banking industry official said, “If Chairman Choi’s suspicion of raising slush funds is true, it is highly likely that the purpose was to raise funds for the future independence of SK Networks.” It also gets quite complicated.”