KT&G CEO booked on corruption charges

Police on Tuesday booked Min Young-jin, president and CEO of KT&G, the nation’s largest tobacco maker, and five other senior executives, on charges of breach of trust in connection with a real estate development project.

They are suspected of overpaying a subcontractor hired last year, inflicting financial damage on their own company.

The National Police Agency sent the case to the prosecution recommending indictment without detention.

The contractor, identified by the initial N, was commissioned to get government approval for the construction of a hotel in Namdaemun, central Seoul.

N was paid about 3.4 billion won, 2.8 billion won more than what is considered a normal fee for the service, police said. The payment was approved by the CEO and the officials.

The police also booked a chief strategy director identified by the surname Baek suspected of helping a head of the subcontractor flee the country.

Baek allegedly urged the businessman, identified only by his surname Kang, to leave the country in order to avoid the police’s ongoing investigation. Kang is reportedly in the Philippines.

Based on testimonies and seized documents, the police believe that KT&G officials granted business favors to Kang and attempted to destroy evidence to cover up the allegations.

KT&G countered the police’s investigation results, saying the subcontractor was paid the right amount of money under “fair” business judgment. Also, Kang was not coaxed by the officials but left the country voluntarily, the company said.

By Cho Chung-un (christory@heraldcorp.com)