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South Korean family business head jailed for four years

Kim Seung-Youn, chair of South Korean conglomerate Hanwha, has been jailed for four years and fined 5.1 billion Korean won (€3.7 million) after being found guilty of embezzlement.

Kim Seung-Youn, chair of South Korean conglomerate Hanwha, has been jailed for four years and fined 5.1 billion Korean won (€3.7 million) after being found guilty of embezzlement.

The 60-year-old head of the family business, whose operations range from manufacturing and construction to financial services, was sent directly to jail following the ruling by a South Korean court today.

This was in stark contrast to previous rulings against top businessmen in the country, which ended in either a suspended sentence or a presidential pardon soon after.

The court found Kim guilty of using funds of the family firm – some of whose subsidiaries are publicly traded – to support other companies that he and several family members owned.

“As a controlling shareholder of Hanwha Group, the defendant is passing on his responsibility to working-level officials and he has not shown remorse. Considering this, he needs to be strictly punished,” a judge in the three-strong panel reportedly said during the hearing. Kim has denied all the charges and will appeal the sentence.

This is not the first time Kim, who succeeded his father as head of the company in 1981, has hit the headlines. In 2007, he was jailed briefly, before being pardoned, for hitting a man with a steel pipe.

The chaebol had 2011 revenues of $31.67 billion (€25.8 billion), up from $26.53 billion the previous year, making it one of the biggest businesses in the country. Following Kim’s sentence, shares of Hanwha dropped by around 5%.

Other heads of large chaebols, including Samsung Group’s Lee Kun-hee and Hyundai’s Chung Mong-Koo, have been previously convicted of crimes but were given suspended sentences and subsequent pardons.

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