http://www.forbes.com/sites/johnkoppisch/2013/04/24/cashing-in-on-pop-culture/print/

http://www.koreaherald.com/view.php?ud=20140214001178

http://koreajoongangdaily.joins.com/news/article/article.aspx?aid=2994782&cloc=joongangdaily|home|newslist1

http://www.koreatimes.co.kr/www/news/opinon/2015/04/351_171136.html

John KoppischForbes Staff

FORBES ASIA 4/24/2013 @ 5:50PM 7,447 views

Cashing in on Pop Culture

If 2012 was the year the Korean Wave came ashore around the world, then certainly Lee Jay-Hyun made one of the biggest splashes. His CJ Group is big in Korean entertainment, and at a time when Korean movies and K-pop songs seem to be everywhere, that has helped goose the stock price. Lee’s wealth jumped 70%, to $1.7 billion, over the past year, riding an 84% leap in holding company CJ Corp.’s stock price. He moved up to No. 10 on the list, from No. 22 a year ago.

CJ was a darling of investors looking for a safe domestic play in an uncertain year for the customary locomotives of the Korean stock market, the big manufacturing exporters. It generated revenue of $25 billion last year and boasts operations from food services to biotechnology and logistics. “Exporters were usually the main players in the stock market, but last year they posted poor results due to the market situation in developed countries,” says Lee Hoon, who covers CJ for Korea Investment and Securities in Seoul. “But look at the business portrait of CJ: They are domestic players and they are stable and reliable, so most [of the companies] saw earnings momentum and record high share prices.”

CJ E&M, the entertainment and media arm, turned in $1.3 billion in revenue and is growing fast. It promotes Korean food, drink, film, music and television shows, leveraging local pride in the country’s growing cultural success overseas. Lee’s sister, Lee Mi-Kyung, or Miky Lee, heads the unit and led the marketing charge of Korean pop content across Asia. She’s hoping for the company’s first Hollywood blockbuster, the big-budget sci-fi epic Snowpiercer, being released this summer.

Lee may be the biggest percentage gainer on the list, but his uncle, Samsung ChairmanLee Kun-Hee, was the biggest gainer in dollar terms, adding $1.8 billion to his fortune. He came in at No. 1, as he has for every year since FORBES ASIA started compiling a roster of South Korea’s richest in 2005. No. 2, Hyundai’s Chung Mong-Koo, saw his net worth shrink by $1.2 billion, to $5.4 billion.

Overall, the Korean stock market’s decline over the past year–the Kospi slipped 3.3%–and the won’s very slight decrease against the dollar took a toll on the country’s richest. Some 17 fortunes rose, but 18 declined and another 2 fell off the list. The net worths of 3 people came in the same as 2012. There are 22 billionaires, just as there were a year ago.

This year we expanded our list to 50 names, from 40 previously. That helped 6 new people make the cut–including a self-made car dealer at No. 37, a casino operator at No. 44 and a second person from Internet company NHN at No. 45. Six returned to the list after missing the cutoff for at least a year. That includes 2–at Nos. 35 and 38–whose poor health got them out of prison but who could be back behind bars if they get better. But the list wasn’t long enough for Huh Jung-Soo of GS and solar company OCI’s Lee Soo-Young, who dropped off.

CJ chairman sentenced to 4 years in jail

2014-02-14 20:40

A Seoul court on Friday sentenced CJ Group chairman Lee Jay-hyun to four years in prison for embezzlement and tax evasion.
Lee Jay-hyun was found guilty of misappropriating 165.7 billion won ($156 million) in company assets to offshore slush funds and dodging taxes in the process. In the same ruling, the Seoul Central District Court also ordered the 54-year-old tycoon to pay a fine of 26 billion won.
“With his influence, (the defendant committed crimes that) resulted in hindering the group’s image and development as a whole. The court is imposing tough punishment against the defendant, considering the scale of the crime and the defandant’s social status and social reponsibility,“ Judge Kim Young-gwan said in his ruling.
The court, however, did not immediately lock up Lee, the country’s 10th-richest man, saying that he is not a flight risk.
The court also sentenced CJ Global Holdings vice president Shin Dong-ki to three years in prison with a five-year stay of execution for aiding Lee’s crime.
Two other former or current executive members who colluded with Lee, surnamed Sung and Bae, were sentenced to three years in prison with a four-year stay of execution, and two years and six months in prison with a three-year stay of execution, respectively.
Following the verdict, Lee’s lawyer told reporters that he would lodge an appeal with a higher court, as Lee’s claim of innocence over slush fund management has not been acknowledged.
“It’s too bad that the court didn’t accept the chairman’s claim of innocence, especially concerning the management of slush funds. It’s been managed separately for business purposes only,” a CJ spokesman told reporters after the ruling.
Prosecutors initially asked the court to sentence Lee to six years behind bars for violating the laws.
Lee is currently standing trial without detention after he requested the suspension of imprisonment citing his poor health. He underwent a kidney transplant surgery last August.
Lee was indicted last July on charges of embezzling some 165.7 billion won for slush funds and dodging 54.6 billion won in taxes.
Charges against Lee were brought to attention last year when prosecutors widened their probe into food and entertainment giant CJ Group, tracing offshore bank accounts and slush funds.
Investigators suspected that Lee, with the help of four executive members, set up paper companies in the British Virgin Islands to evade taxes and to operate overseas slush funds of about 260 billion won.
CJ Group, which covers sectors ranging from pharmaceuticals to entertainment, was part of Samsung Group until 1997. Lee Jay-hyun is also a nephew of Lee Kun-hee, the chairman of Samsung Electronics Co. and South Korea’s richest man.
Currently, top executives of several other big corporates also face charges ranging from embezzlement to tax evasion, including SK Group’s Chey Tae-won, telecom giant KT’s former chairman Lee Seok-chae, Tong Yang Group’s former chairman Hyun Jae-hyun and Hyosung Group chairman Cho Suk-rae.
By Suk Gee-hyun and news reports
(monicasuk@heraldcorp.com)

CJ chairman is given jail time

Appeals court reduces charges but refuses a suspended sentence

Sept 13,2014

An appeals court yesterday sentenced CJ Group Chairman Lee Jay-hyun to prison for a series of financial crimes, despite his poor health and a plea for leniency from some of his powerful relatives.
The Seoul High Court found Lee, head of the country’s 14th-largest conglomerate, guilty of embezzlement, breach of fiduciary duty and tax evasion. The 54-year-old tycoon was sentenced to three years in prison and was ordered to pay a fine of 25.2 billion won ($25.35 million).
The court, however, did not send the tycoon directly to jail, citing his poor health. Lee received a kidney transplant in August last year and is in a hospital.
Citing his health, Lee’s relatives, who are members of the nation’s biggest conglomerates, sent a petition to the Seoul High Court last month seeking leniency. Among those who signed the petition was Jay Y. Lee, vice chairman of Samsung Electronics and the son of Samsung Chairman Kun-hee.
They made a plea for mercy citing the CJ chairman’s poor heath and also pointed out that his imprisonment would harm CJ Group.
While upholding most of a lower court’s ruling, the Seoul High Court reversed some of the earlier embezzlement convictions. It said Lee’s creation of slush funds could not be automatically regarded as embezzlement. The appeals court also acquitted Lee on some of the charges of breach of fiduciary duty and tax evasion.
In the latest ruling, the court concluded that Lee embezzled 11.5 billion won and evaded 25.1 billion won in taxes. The court also found that he caused 30.9 billion won of damage to CJ Group through his breach of fiduciary duty.
The prosecution indicted Lee in July 2013 on charges of embezzlement, breach of fiduciary duty and tax evasion, claiming that the total amount of money involved in his crimes was 160 billion won.
As the Seoul High Court acquitted Lee on some charges, it handed down a lesser punishment to the tycoon. The Seoul Central District Court handed down a four-year jail term to Lee in February.
Although the law allows a prison term of up to three years to be suspended with probation, the court did not suspend Lee’s sentence.
The court, however, handed down yesterday suspended prison terms to other CJ executives who were convicted in the same case. CJ Group said it will appeal the rulings.
“Lee’s health condition is so serious that imprisonment is like a death penalty to him,” said a CJ official. “It is regretful that the court handed down a jail term. The group will also face unavoidable obstacles in its business and investment without his management.”
BY SER MYO-JA, PARK EUN-JI [myoja@joongang.co.kr]

Updated : 2015-01-05 17:10

Justice or economics?

Andrew Salmon

It’s that time of year again: The time of year to recover from lingering hangovers; to implement those pesky new year’s resolutions; and to, er, parole or pardon the depressingly long roster of corporate criminals.
Voices have been rising in the ruling party and the administration for the president to exercise her right to grant paroles and/or pardons to these white-collar wrongdoers. And there are a lot of them ― almost a “Who’s Who” of Korea Inc’s elite.
Tycoons attending the boardroom behind bars include (deep breath): SK Group Chairman Chey Tae-won and his younger brother, both serving raps for embezzlement; CJ Group Chairman Lee Jae-hyun for embezzlement, breach of trust and tax evasion; LIG Group Chairman Koo Bong-sang, for defrauding investors; Tongyang Group Chairman Hyun Jae-hyun for a billion-dollar-plus fraud; Taekwang Group Chairman Lee Ho-jin for embezzlement and breach of trust; and ex-STX Chairman Kang Duk-soo, for embezzlement and accounting fraud.
Given that these gentlemen knew what they were doing when they committed their crimes; given that they are entitled, privileged and otherwise unaccountable; and given that Korean chairman have an appalling record of committing crimes then being pardoned ― why should they be released?

The head of the Korean Chamber of Commerce and Industry said, in an interview with this newspaper, that Chey should be released because he has served over one third of his sentence. Naturally, we should expect the head of the KCCI ― the big business lobby group ― to champion big businessmen, but I do not find his argument at all compelling. (Particularly given that this is Chey’s second sojourn behind bars.)
More problematically, that old saw ― that chairmen must be released for the good of an economy which is, apparently, “in the doldrums” has been aired yet again ― by no lesser a personage than the head of the ruling Saenuri Party, who notes that only top chairman can make major investment decisions. This is problematic for three reasons.
First: Korea’s economy is moving at a pretty fair clip: The country anticipates GDP growth for 2014 of 3.4 percent, and 3.8 percent this year. For an advanced economy, these are no “doldrums.”
Second: Should massive business groups be beholden to jailed chairmen? Are there no other persons (eg CEOs) or bodies (eg boards of directors) which can take important decisions? And if not ― why not?
Third: Should grateful chairmen, freshly out of pokey, order the injection of a few trillion won worth of capital into the economy in return for their personal freedoms, rather than for any pressing business needs? This smacks of moral hazard ― bribery, even.
An even broader, more fundamental question faces Korean society ― one raised (I would guess inadvertently) by the ruling party spokesman, who stated: “We urge the government to deeply agonize over the issue, given the two criteria of economy and law.”
This is the big question. What should take precedence: justice or economics?
It must be justice. If there are no clear rules to govern society, and mechanisms to enforce then, then we have a recipe for opacity, unfairness, money/power abuse, and ultimately anarchy or revolution.
And the judiciary is the only force reigning in chaebol chairmen. While the National Pension Service consistently threatens to hold corporations to account, shareholder activism is rare in Korea, and understanding of shareholder’s rights is weak. Thus there is no internal, institutional brake ― “economic democracy” ― on the dubious practices of hereditary chairman.
While the media, have on occasion, called corporate royals to account (a good example being the ongoing “Heathergate” farce) Korean press insiders say, off the record, that chaebol wield major power with their advertising budgets ― power that can shift editorial stances.
Then we have the regulators, who have, when it comes to dealing with corporate crime, shown either lack teeth, or failure to bite. And as noted from the voices inside Saenuri Party, chaebol ruling families ― arguably the most powerful players in the Korean establishment ― have plenty of allies/protectors in high places.
That leaves justice as the last resort. The right to parole or pardon is a presidential prerogative, but Ms. Park has to exercise that power via the Justice Minister (who she appoints). If he does, indeed, release these criminals on the grounds that economics trump justice, then surely he is heading the wrong ministry?
If we see the cells of corporate criminals flung open early in the new year, I humbly suggest the Minister of Justice be immediately reassigned as Minister of Strategy and Finance. Happy 2015!
Andrew Salmon is a Seoul-based reporter and author. Reach him atandrewcsalmon@yahoo.co.uk.