Chairman of Orion Group indicted in slush fund scandal

SEOUL, June 13 (Yonhap) -- Orion Group Chairman Tam Cheol-gon was indicted Monday on charges of embezzlement and breach of trust following a months-long investigation into a slush fund scandal gripping the confectionery and media conglomerate, prosecutors said.
Tam, who has been in custody since his May 26 arrest, is accused of ordering the group's executives to set aside about 30 billion won (US$27.8 million) in slush funds between 2002 and 2007 and exploiting 7.4 billion won for personal purposes.
The 56-year-old Tam, the son-in-law of late Orion founder Lee Yang-gu, is also suspected of causing some 4 billion won in damage to Orion through his misconduct.
Prosecutors said Tam's wife, Lee Hwa-gyeong, was involved in some of the charges, but did not book her for investigation, citing her health problems and the indictment against her husband.


According to prosecutors, Tam ordered executives on the group's finance team, who have already been arrested, to embezzle about 14 billion won in company money through transactions of pieces of art.
It is the first time that an embezzlement charge has been leveled against a conglomerate owner who allegedly used company funds to buy art pieces.
Hong Song-won, head of Gallery Seomi, one of the nation's prominent art galleries, was charged with helping Tam stash funds and launder money via deals involving art pieces.
Tam was also accused of incurring some 3.1 billion won in damage to Orion by selling an affiliate of the group in Hong Kong at a below-market price.
He is also suspected of spending company funds to lease luxury foreign-made cars, including a Lamborghini and Porsche, for personal purposes.
Several Orion executives have been arrested on similar charges since March when the investigation into the slush fund case began.