Former Vice President of Hyosung Cho Hyeon-mun, the second son of Hyosung Group Chairman Cho Seok-rae, reported his brother Cho Hyeon-jin to the Seoul District Prosecutors' Office on charges of embezzling billions won of company money and causing damage to the company.
Prior to the accusation, former Vice President Cho had also implicated Choi Hyeon-tae, CEO of real estate management company Trinity Asset Management, which is an affiliate of Hyosung, and Shindongjin Co., Ltd last July.
Cho additionally implicated seven former and current executives of Hyosung affiliates such as Galaxia Electronics, Nautilus Hyosung, and Hyosung Information Systems (HIS). His elder brother, President Cho, is the largest shareholder of these affiliates.
Former Vice President Cho claimed in the complaint, “Galaxia Electronics purchased more than 2.2 million shares owned by president Cho at higher prices, which made him gain 16.5 billion won,” adding, “President Cho siphoned off 1.14 billion won [US$1.08 million] by falsifying that a Hong Kong paper company, which is actually managed by president Cho behind the curtain, pretends to do business consulting with Nautilus Hyosung.”
A Hyosung Group representative said that “It's very sad to see him overuse accusations to not only the company that he once worked for, but also the executives and even his brother,” adding, “There are a lot of things that are different from the truth, so it will turn out to be a distorted argument during the investigation process.”
Cho resigned his vice presidency in September 2011. The trouble between brothers started to loom since former vice president Cho sold his stock outside of the family in February 2013. His father Cho Seok-rae, chairman of Hyosung, is currently standing trial on charges of tax evasion and siphoning off company money to the tune of approximately 100 billion won (US$94.4 million), according to the additional punishment law on specific crimes.