February 27, 2014 / 3:31 AM / in 4 years

S.Korean court confirms 4-year jail term for SK chairman

SEOUL, Feb 27 (Reuters) - South Korea’s supreme court confirmed a four-year prison sentence imposed on SK Holdings Chairman Chey Tae-won for embezzlement on Thursday in what is one of the longest confirmed prison terms for a business leader in the country.

The ruling is one of the toughest confirmed sentences to date against a head of a major family-owned conglomerate, or chaebol, and stands in stark contrast to a string of suspended sentences that South Korean courts had been handing out to business leaders.

Chey had been found guilty in an appeals court last year of embezzling about 45 billion won ($42.24 million) in corporate funds of SK units for personal gain.

Samsung Electronics Chairman Lee Kun-hee received suspended sentences in both 1996 and 2009 for charges such as tax evasion, while Hyundai Motor Group Chairman Chung Mong-koo also received a suspended sentence in 2008 for charges such as setting up a slush fund.

Chey himself had received a suspended sentence in 2008 for a charge of irregularities in internal transactions. All three suspended sentences had been followed by presidential pardons.

The ruling for Chey follows a suspended sentence for another head of a major conglomerate, Hanwha Group Chairman Kim Seung-youn, earlier this month.

Chey has been serving out part of his prison term since January 2013 in what is the already longest time spent in jail for a major conglomerate owner to date. He remains chairman of SK Holdings and two other units.

A SK Group spokeswoman was contacted but did not have an immediate comment.

Shares of SK Holdings, a holding company of South Korea’s third-largest conglomerate SK Group, rose 6.9 percent at 0255 GMT after the company announced a 419.5 billion won ($394 million) stock buyback on late Wednesday.

Shares in affiliate chipmaker SK Hynix were flat, while South Korea’s largest oil refiner SK Innovation fell 0.4 percent compared to a 0.1 percent gain in the wider market.

($1 = 1065.3000 Korean won)

Editing by Matt Driskill

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