Hanwha's latest business: chairman's legal problems

Posted on : 2007-05-03 15:33 KST Modified on : 2019-10-19 20:29 KST

Hanwha group chairman Kim Seung-youn is being accused of using Hanwha's lawyers and employees to help him with his legal troubles involving a case where he accused of beating up employees at a bar to avenge an earlier brawl that involved his son. Company officials say it's "unavoidable in Korean corporate culture," but critics say it is exactly the kind of behavior at the country's powerful family-run conglomerates that needs to change. Hanwha is the country's 10th largest business group.

Kim is being investigated by police after he was accused of allegedly mobilizing the group's corporate guards and beating off-duty bar workers on March 8 after his 22-year-old son was beaten by the workers in a scuffle at a luxury establishment.

On May 2, a petition to the legal authorities circulated among Hanwha's affiliates and subsidiaries. Executives say it was voluntary and originated with low-level employees, but this has not stopped accusations that workers are being conscripted to appease public criticism of the chairman's personal wrongdoings.

When Kim was summoned to a Seoul police station for interrogation on April 29, Hanwha's public relations team issued a press release titled, "The Human Side of Chairman Kim Seung-youn." Employees from the public relations office were present to guard the chairman and his son when the elder Kim appeared before police, when his son arrived back in Korea at Incheon International Airport on April 30, and when authorities served a search warrant on the Kim home in Seoul's Gahoe-dong on May 1.

The use of Hanwha's legal team is also causing controversy. When Kim appeared at the police station on April 29, he was accompanied by Chae Jeong-seok, head of Hanwha's legal team, and two attorneys at Kim & Chang, KㅐKorea's largest law firm. Some 10 lawyers from Hanwha's legal team have reportedly joined his defense team.

On May 2, the Solidarity for Economic Reform (SER), a civic group, sent a letter to Hanwha, saying, "If it is true the group's legal advisors are being used, the chairman will cause a huge loss for the company by exploiting Hanwha's assets and workforce." It urged Hanwha to return its lawyers to their normal works and to file a criminal suit against executives who let the lawyers be part of Kim's defense. SER also said the chairman could be charged with breach of trust for having corporate guards and employees at the scene of his violence and interrogation.

In response to the criticism, Hanwha issued a press release in the afternoon of May 2, saying, "The defense team consists of three outside lawyers. Lawyers from the company's legal advisors weren't included." Hanwha said the chairman would pay for legal expenses out of his own money. But it also said Hanwha lawyers will handle issues that are problems for the company even if they result from the legal case.

"In advanced nations, companies are supposed to draw a line between the company and its employees when wrongdoing on the part of executives and employees are unearthed," said SER official Choe Han-su. "Basically, the company is a victim and it needs to investigate exactly what happened."

Please direct questions or comments to [englishhani@hani.co.kr]

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