SEOUL, Jan. 31 (Yonhap) -- The head of South Korea's third largest conglomerate, SK Group, was sentenced to four years in jail on Thursday for embezzling a massive amount of company funds.
Chey Tae-won, 53, was found guilty of embezzling 49.7 billion won (US$44.5 million) from two SK Group affiliates and funneling the funds into a firm headed by a former executive at SK's telecommunications unit. The funds were used for investments in stock futures and options in 2008.
The disgraced chairman was imprisoned immediately after the Seoul Central District Court handed down the ruling. SK Group has more than 90 affiliates, mainly in the fields of energy and telecommunications.
The executive, Kim Joon-hong, took orders from Chey's younger brother, Jae-won, and transferred the money to a South Korean investor overseas who was responsible for the brothers' investments, according to court documents.
The court, however, acquitted the 50-year-old Chey Jae-won, the group's vice chairman, in the embezzlement case, citing a lack of credibility in testimony from witnesses.
"Chairman Chey Tae-won should be largely blamed for using his affiliates as a means of his crime and privatizing the firm," Judge Lee Won-bum said in his ruling, adding that the chairman has not shown sincere remorse for his crime.
Chairman Chey strongly denied his charges, saying in the court that he was not involved in the act of embezzlement.
"I don't know why I failed to prove my innocence. But I didn't do anything wrong. This is all I can say," said the chairman, who was previously imprisoned in 2003 on charges of accounting fraud.
The court cleared the elder Chey of the charge of creating slush funds worth nearly 14 billion won after ordering executives at SK affiliates to return a portion of their inflated annual bonuses.
SK officials said they will take all available legal measures to prove the chairman's innocence, including appealing to higher courts.
The landmark ruling is largely seen as the court's effort to break away from a long judicial track record of giving light punishments to owners of family-run conglomerates, or chaebol, citing their importance to the national economy.
Chey was previously sentenced to three years behind bars in 2003 for accounting fraud and illegal stock trading. However, he was released on bail the same year.