Hyosung chairman appears for questioning over slush fund allegations

Hyosung Group Chairman Cho Hyun-joon appeared at prosecutors' office for questioning Wednesday about suspicions that he siphoned off company money to create a slush fund and engaged in other irregularities.

Hyosung Group Chairman Cho Hyun-joon speaks to reporters after arriving at the Seoul Central District Prosecutors' Office for questioning on Jan. 17, 2018. (Yonhap)

Hyosung Group Chairman Cho Hyun-joon speaks to reporters after arriving at the Seoul Central District Prosecutors' Office for questioning on Jan. 17, 2018. (Yonhap)

"I am sorry for causing trouble with a family problem. I will be sincere during the questioning," Cho told reporters after arriving at the Seoul Central District Prosecutors' Office, referring to the fact that the allegations against him grew out of a feud with his brothers over control of Korea's 25th largest conglomerate.

Cho is accused of creating a slush fund worth about 10 billion won (US$9.42 million) from 2010-2015 by having Hyosung purchase construction materials through a paper company established by one of his close aides.

Investigators are also looking into suspicions that Cho had Hyosung provide tens of billions of won to an ailing affiliate in which he has a stake, embezzled company money through trading art works, and created a slush fund overseas in the form of sending billions of won to a paper consulting firm in Hong Kong.

He is also suspected of putting four women, including a beauty pageant winner-turned-actress, on the company payroll even though they were never actually employed.

The allegations against him were raised after Cho's younger son, Hyun-moon, filed dozens of complaints with the prosecution seeking an investigation into the elder brother since July 2014. Cho and his two brothers have been embroiled in a family feud over the leadership succession.

Hyosung's businesses stretch from textiles, chemicals and trading to heavy industries and construction. Yonhap.

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