A South Korean executive was sentenced to four years in prison Thursday for embezzling more than $40 million from his conglomerate, the third-largest of the massive and powerful chaebols that have long dominated the South Korean economy.
SK Group Chairman Chey Tae-won denied any wrongdoing and said he didn’t know why he hadn’t swayed the court. “I didn’t do anything wrong. This is all I can say,” the Yonhap news agency quoted Chey as saying. SK Group, in a statement cited by South Korean news reports, said it planned to appeal.
The sentence handed to Chey is much stiffer than those South Korean courts have imposed on executives of chaebols, large conglomerates usually controlled by a single family. The verdict comes after years of complaints that tycoons with the firms have been given too much deference in South Korean courts.
“Almost all politicians say they’ll address it when campaigning and almost none have done anything about it,” said Charles K. Armstrong, director of the Center for Korean Research at Columbia University. The stiffer sentence could be “a sign of getting really serious about clamping down on business corruption.
“We will see if the conviction holds,” he said.
Sentences for chaebol bosses convicted of fraud and embezzlement have been softened in years past; a Samsung Electronics chairman convicted of tax evasion was pardoned in 2009.
“It appears these tycoons are living their lives with a sense of entitlement, a sense that they are untouchable,” Kim Sang-jo of the civic group Solidarity for Economic Reform told The Times two years ago, when a member of the Chey family was accused of beating a protester.
The massive firms were lionized because they were seen as key to the South Korean economic boom. Jailing chaebol heads could hurt the economy, some courts had argued. But the South Korean public has steadily soured on the lighter sentences for chaebol tycoons.
“Chey was destined to face harsher punishment yesterday” because he had an earlier conviction for other financial crimes, the JoongAng Daily wrote, “but it was also clear that the sentencing was a reflection of a growing consensus in society that white-collar crimes deserve real punishment.”
The question now is whether President-elect Park Geun-hye, who will soon take office, will follow through on her election promises to keep chaebols accountable, Armstrong said.
“The opposition will be observing the president-elect very carefully,” he said.