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Photo courtesy of Yonhap News |
[Alpha Biz= Paul Lee] SEOUL, South Korea — Feb 5, 2026 — Prosecutors have launched a widened investigation into additional allegations of fund misappropriation involving the family of former Namyang Dairy Products Chairman Hong Won-sik, who was recently convicted of breach of trust in the first instance.
The Fair Trade Investigation Division of the Seoul Central District Prosecutors' Office, led by Head Prosecutor Na Hee-seok, summoned a Namyang Dairy accounting official, identified as "A," for questioning last week. According to reports, the prosecution obtained testimony suggesting that Hong’s wife, former advisor Lee Un-kyung, and their two sons, former executives Hong Jin-seok and Hong Beom-seok, allegedly ordered staff to underreport corporate card expenditures.
Authorities are currently investigating whether former Chairman Hong deliberately overlooked the personal use of corporate funds by his family members, despite being the final approver for corporate credit card statements.
This development follows a January 29 ruling where the Seoul Central District Court sentenced Hong’s wife and two sons to suspended prison terms. They were found guilty of misappropriating approximately 3.7 billion KRW (approx. $2.7 million USD) for personal expenses between 2013 and 2024, a violation of the Act on the Aggravated Punishment of Specific Economic Crimes (Breach of Trust).
Prosecutors now suspect that the family may have diverted additional funds beyond the 3.7 billion KRW already identified. They are reportedly reviewing internal approval documents and payment records to trace the full extent of the fund execution.
In a separate but related ruling on the same day, former Chairman Hong was sentenced to three years in prison and ordered to pay 4.376 billion KRW in forfeitures. He was convicted of causing approximately 20.1 billion KRW in losses to the company by misappropriating corporate-owned villas and vehicles and utilizing intermediary shell companies for personal gain.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
