The landmark four-year prison sentence imposed on tycoon Chey Tae Won for embezzlement has shown that although courts are getting tougher on South Korea's privileged classes, a weak corporate governance culture persists, Fitch Ratings said. The ratings agency said the country still lacked an appropriate regulatory framework to deal with its corporate governance shortcomings.
On Thursday, January 31, the Seoul Central District Court sentenced Chey, former chairman of the SK Group, to four years' imprisonment for the embezzlement of 49.7 billion Korean Won ($45 million). As chairman of the country's third-largest conglomerate, Chey was one of the country's top "chaebol", a South Korean term for tycoon. He stepped down as chairman in December last year.
"The four-year prison sentence…will do little in the short term to change Korea's weak corporate governance culture," Fitch said. It said executives convicted of accounting fraud and other financial irregularities in South Korea were
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