Hankook Tire is facing significant challenges following the imprisonment of its chairman, Cho Hyun-bum, who was sentenced to three years in prison for embezzlement and breach of trust. Cho has filed an appeal against the conviction.
Recently, Cho’s legal team submitted an appeal to the Seoul Central District Court. Earlier in May, the court recognized Cho's violations under the Act on the Aggravated Punishment of Specific Economic Crimes, sentencing him to three years in prison and revoking his bail.
The court found Cho guilty of breach of trust for directing 5 billion KRW of funds from the subsidiary Korea Precision Works to be lent to "Rihan," a partner company operated by an acquaintance, without proper measures for debt recovery, causing financial harm to the company.
Additionally, Cho was convicted of using corporate credit cards for personal expenses and purchasing or leasing five luxury vehicles, including Tesla, Porsche, and Ferrari, under the company’s name for personal use. The total amount of embezzlement and breach-related funds was estimated at around 7 billion KRW.
The judiciary remarked, “Chairman Cho exploited his position and status within the company and as part of the controlling family to commit these offenses. Despite having received a suspended sentence for similar offenses before, he repeated his misconduct using comparable methods.”
Cho’s legal troubles date back to 2019 when he was indicted for accepting bribes from subcontractors, leading to a three-year suspended sentence in November 2020. In March 2023, he was once again arrested on charges of improper support to affiliates from 2014 to 2017 and embezzlement and breach of trust involving sums nearing 20 billion KRW.
Meanwhile, Hankook Tire & Technology continues to perform robustly in its tire business sector, with expected operating profits of approximately 1.635 trillion KRW this year. However, Cho’s legal issues pose a significant risk.
An industry insider noted, “Despite Hankook Tire’s success in increasing profitability through higher average tire prices and expanded sales of larger-diameter tires, Chairman Cho’s incarceration raises concerns about potential management voids and the impact on the company’s public image.”
Cho Hyun-bum is the second son of Hankook Tire Honorary Chairman Cho Yang-rae and the son-in-law of former President Lee Myung-bak.
