[Alpha Biz= Paul Lee] Prosecutors have launched a raid on Jung Do-won, chairman of Sampa Group, and related offices amid investigations into allegations that Sampa Industrial unfairly supported a second-generation family company by purchasing ready-mixed concrete (remicon) raw materials at inflated prices.
On the 26th, the Fair Trade Division of the Seoul Central District Prosecutors’ Office (Chief Prosecutor Kim Yong-sik) announced that it is conducting a search and seizure operation at Chairman Jung’s residence and Sampa Industrial’s offices on charges including breach of trust under the Act on the Aggravated Punishment of Specific Economic Crimes.
The prosecution suspects that Sampa Industrial purchased raw materials for remicon at excessively high prices from SP Nature, another affiliate within the Sampa Group, causing financial damage to the company.
SP Nature is a company in which Jung’s eldest son, Jung Dae-hyun, holds a 71.95% stake and owns 19.43% of the group’s shares.
In December last year, prosecutors indicted former Sampa Industrial CEO Hong Sung-won and the company itself for causing undue profits worth approximately 7.5 billion KRW by purchasing ‘powder,’ a cement substitute used as remicon raw material, at inflated prices, with the intention of making SP Nature the group’s parent company.
Following Hong’s indictment, the prosecution has continued to investigate additional breach of trust charges against the family members.
The raid on Chairman Jung is seen as a determination that the preferential dealings by Sampa Industrial were a deliberate effort related to the group’s succession plans.
A key issue is whether Chairman Jung was directly informed of and gave instructions on the raw material transactions handled by former CEO Hong.
Once the analysis of seized materials is complete, prosecutors are expected to summon Chairman Jung to investigate possible links to the succession process.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
