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Hong Won-sik, former chairman of Namyang Dairy Products (Photo courtesy of Yonhap News) |
[Alpha Biz= Paul Lee] Hong Won-sik, former chairman of Namyang Dairy Products, was sentenced to three years in prison on charges including embezzlement and breach of trust involving more than 20 billion won, a Seoul court ruled on January 29.
The Seoul Central District Court’s Criminal Division 21 sentenced Hong to three years’ imprisonment and ordered him to forfeit 4.376 billion won. The court decided to allow Hong to remain free on bail, citing his health condition and efforts to recover shareholder losses.
Of the eight charges brought against Hong, the court found him guilty of breach of trust under the Act on the Aggravated Punishment of Specific Economic Crimes for privately using corporate assets—including a company-owned resort and vehicles—causing losses of approximately 3 billion won. The court also convicted him of accepting rebates totaling 4.37 billion won from four Namyang Dairy business partners, classifying the conduct as acceptance of bribes in connection with breach of trust.
However, the court acquitted Hong of allegations that he caused losses to the company by unfairly inserting specific suppliers into business transactions, citing insufficient evidence. It also ruled him not guilty of charges related to allegedly false advertising of Namyang Dairy’s “Bulgaris” product in 2021, which was accused of being promoted as having COVID-19 suppression effects.
Charges that Hong ordered the destruction of evidence following the launch of investigations into the Bulgaris case were also dismissed due to lack of proof. In addition, the court rejected claims of third-party bribery related to Hong arranging employment for a relative at a supplier, finding no evidence of improper solicitation or undue benefit.
Allegations that Hong embezzled funds disguised as advertising fees and audit-related salaries were either dismissed due to the statute of limitations or resulted in acquittals.
Prosecutors had accused Hong of receiving approximately 1.65 billion won in advertising fees and audit-related payments from suppliers and causing losses of more than 17.1 billion won by inserting companies operated by relatives into Namyang Dairy’s supply chain. He was indicted in custody on December 16, 2024.
Additional charges included receiving rebates totaling 4.37 billion won from four suppliers, arranging for a cousin to receive approximately 600 million won in salary from a supplier, and privately using corporate assets worth about 3 billion won.
The prosecution had sought a 10-year prison sentence and forfeiture of approximately 4.3 billion won for Hong. Prosecutors also demanded prison terms ranging from two to five years for other defendants, including a former head of Namyang Dairy’s central research institute and a former chief executive officer.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
