Pan-LG heir sued for fraud

  Koo Bon-ho, an adviser to Galaxia Communications, on Monday was accused of fraud and embezzlement.

Prosecutors at the Seoul Central Prosecutors’ Office said Koo is accused of receiving more than 1 billion won ($909,000) in cash and a luxury car from a KOSDAQ-listed company executive, in exchange for promising him a 5 billion won investment in 2010.

However, the investment was never made and the plaintiff had to pay for corporate tax and other costs while squeezing out the 1 billion won kickback for Koo, according to court papers.

Prosecutors said Koo had allegedly forced the plaintiff to give him a 700 million won kickback from a 1 billion won donation Koo gave to a charity foundation run by the plaintiff’s father. Koo had also allegedly pocketed another 300 million won in cash and a 90 million won Mercedes-Benz car for his girlfriend.

Local broadcaster YTN reported that LG’s lawyers tried to downplay the case, asking the plaintiff to cover up Koo Bon-ho’s name. An LG spokesman did not respond to The Korea Herald’s calls for comment.

Koo is the grandson of Koo Jeong-hoe, the younger brother of LG Group founder Koo In-hoe. He is the second cousin of current LG chairman Koo Bon-moo.

Koo Bon-ho earlier this year made headlines when he announced a joint project with Hyosung heir and Hyosung Corp. CEO Cho Hyun-joon, which involves some 40 billion won in investment. This includes a 12 billion won investment in online game company Action Square.

By Bae Ji-sook (baejisook@heraldcorp.com)