Another chaebol heir caught smuggling liquid marijuana into South Korea

Posted on : 2019-09-03 17:11 KST Modified on : 2019-10-19 20:29 KST
Latest arrest in a string of drug-related crimes by youngest generation of conglomerate families
Lee Sun-ho
Lee Sun-ho

Lee Sun-ho, a 29-year-old manager at CJ CheilJedang, was recently caught trying to bring liquid marijuana into South Korea. Lee is the eldest son of CJ Group Chairman Lee Jae-hyun and a great-grandson of Samsung founder Lee Byung-chul, as well as the presumed heir of the CJ Group fortune.

Lee Sun-ho’s arrest is the latest in a string of drug-related crimes by the youngest generation of families that control Korea’s chaebols, stirring up a scandal and turning public opinion against the chaebols. Through such repeated behavior, the chaebol leaders are effectively destroying the public trust they’ve long enjoyed, observers say. This latest incident is sure to impede efforts to hand control of the CJ Group to Lee Sun-ho.

Sources at the prosecutors and the CJ Group told the Hankyoreh on Sept. 2 that Lee was under suspicion of violating the Narcotics Control Act. He was caught attempting to smuggle several dozen cartridges of liquid marijuana in his luggage on a flight from the US that landed at Incheon International Airport early in the morning on Sept. 1.

South Korean customs authorities found the contraband while they were searching inbound passengers and handed Lee over to the violent crimes department (headed by Senior Prosecutor Kim Ho-sam) at the Incheon branch of the prosecutors. Lee was booked without detention as the investigation continues. Reports show that a drug test came back positive and that Lee has admitted to bringing the marijuana. Under the Narcotics Control Act, a drug smuggling conviction carries a sentence ranging from five years to life in prison.

SK and Hyundai Group heirs also recently charged for smuggling highly concentrated liquid marijuana

The liquid marijuana cartridges that Lee attempted to bring into the country are reportedly the same kind of highly concentrated liquid marijuana consumed by heirs of the families controlling the SK and Hyundai groups. Previous cases involved 31-year-old Choi Young-geun, son of late SK Chemical Chairman Choi Yoon-won and grandson of SK Group Founder Choi Jong-kun, and 28-year-old Chung Hyun-sun, son of Hyundai M Partners Chairman Chung Mong-il, who was himself the eighth son of Hyundai Group Founder Chung Ju-yung. Both Choi Young-geun and Chung Hyun-sun were booked and detained on charges of smoking liquid marijuana and are currently on trial.

All three of these individuals have either studied abroad or lived overseas for a long time, with Lee Sun-ho attending Columbia University in the US and Choi Young-geun studying at Parsons School of Design. “Marijuana is added to gelatin treats and cookies in areas where it’s been legalized, while liquid marijuana is sometimes disguised as liquid tobacco, which has recently come on the market in South Korea,” explained a lawyer who has considerable experience in narcotics cases.

Since joining CJ CheilJedang in 2013 as a regular employer at the age of 23, Lee Sun-ho has been getting some practical education in management, moving up the ranks with promotions in 2015, 2016, and 2017. The CJ Groups started working on the power handover this past April with the spinoff of its subsidiary CJ Olive Networks. The Olive Young and IT divisions had been merged in 2014 only to be split up once more, turning the IT division into an affiliate completely owned by CJ, the holding company.

These restructuring efforts gave the younger Lee his first stake (2.8%) in the holding company. The seed money here came from stock in the IT division that Lee Jae-hyun had given his son shortly before the merger in 2014. Lee Sun-ho’s acquisition of a stake in the holding company was apparently accomplished with relative ease during the merger and spinoff five years later of two business divisions without any apparent correlation.

Drug scandal may halt Lee’s inheritance of CJ Group control

Depending on how the drug smuggling case plays out, the push to give Lee Sun-ho control of the CJ Group may be halted. The string of recent drug cases has put the public on edge, and some think that Lee made a grave moral error by allowing himself to get caught up in drug charges while the management transition was in full swing.

“Unlike the chaebol founders and their children, the members of the third generation have risen to responsible positions without personally experiencing all the aspects of founding and running these companies. Unless their friends and family give them strict guidance and supervision about the social responsibility and morality that are necessary for business, questions may be raised about their suitable for management,” one figure in the business community said.

When 40-year-old Hur Hee-soo, vice president of the SPC Group and second son of group founder Hur Young-in, was booked and detained on charges of smuggling and smoking liquid marijuana last year, the group announced that the younger Hur was being removed from management. SPC Group is a confectionary company that runs the Paris Baguette line of bakeries

When contacted on Monday, the CJ Group declined to comment because of the ongoing investigation.

By Hyun So-eun and Lee Jung-ha, Incheon correspondent

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