Does Hanwha head deserve bail?

Kim Seung-youn Hanwha Group chairman

Hanwha Group Chairman Kim Seung-youn, serving a jail sentence for convictions on embezzlement and breach of trust, has applied for bail due to deterioration in his health, while his lawyers prepare an appeal case.

According to Seoul High Court and Hanwha officials on Thursday, the 60-year-old submitted an application for bail to the court on Tuesday.

The application comes three months after he was put behind bars in August, when a lower court sentenced him to four years in prison, plus a fine of 5.1 billion won for inflicting huge losses on the firm and its shareholders. Kim appealed and the high court is now weighing the arguments of his case.

“As the trial is expected to continue for a long period, he needs time to prepare his defense. His health has deteriorated during his imprisonment, so we applied for bail,” a lawyer for Kim said.

The tycoon was charged with having the group’s affiliates repay 320 billion won of debt of firms he owned under false names, and embezzling company funds through a series of accounting frauds between 2004 and 2006.

The lower court also acknowledged that he evaded taxes by engaging in stock transactions using false-name bank accounts and had Hanwha subsidiaries sell shares to his older sister at below-market prices.

At the first hearing for the appeal on Oct. 22, Kim arrived with his left leg in a cast while walking on crutches. Hanwha officials said he broke his left ankle after losing his footing and falling over in prison.

He also had a rather swollen face. “Specially prepared food is not allowed in the prison, so his diabetic symptoms became worse,” a group official said at that time.

The high court will soon decide whether to issue bail after deciding if there is a reasonable cause.

Hanwha officials said the chairman’s absence affects the company’s business. Hanwha Engineering & Construction CEO Kim Hyun-chung said Wednesday, “Although we have received the largest order for overseas construction projects this year among domestic construction firms, another order for a project in Iraq worth over $10 billion has come to a standstill due to Kim’s absence.”

But if the chairman is granted bail, criticism is expected over leniency shown toward business tycoons amid growing demand for “economic democratization” designed to reduce the excessive concentration of wealth on a small number of chaebol owners.

Chairman Kim has previously been arrested three times. In 1993, he was charged with illegally taking out foreign currency to buy a luxury mansion in Los Angeles. He was put behind bars for two months and released after a court gave him a suspended jail sentence.

In 2007, he was arrested for hitting several men with steel pipes in revenge for a scuffle with his son at a bar. He was the first conglomerate head to be arrested on charges of violence.

At that time Kim also sought bail, which the lower court rejected. While appealing, he was hospitalized for health problems, and asked the high court to suspend imprisonment. The court accepted, and he was hospitalized again. Before the suspension ended, the court gave him a suspended term, so he was released. <The Korea Times/Kim Rahn>