The former head of the financially troubled shipping and shipbuilding conglomerate STX Group was formally detained Tuesday pending trial over alleged embezzlement and business malpractice.
Kang Duk-soo, who headed the group from 2003 to February 2014, is accused of funneling the funds of STX Heavy Industries Co., a troubled shipbuilder unit, to illegally support other ailing affiliates, including STX Construction Co. and STX Dalian Co., and misappropriating company money to bribe politicians.
|Former STX Group chairman Kang Duk-soo is transferred to Seoul Detention House on early Tuesday morning. (Yonhap)|
The Seoul Central District Court approved the prosecutors' request for an arrest warrant for the 64-year-old former chairman after holding a hearing.
"There is legal ground for his criminal charges, and this case is very grave," Judge Yoon Gang-yeol said in issuing the warrant.
The judge also cited the possibility of the suspect fleeing and destroying evidence.
Facing a barrage of reporters' questions, meanwhile, Kang only said, "I am sorry. I will sincerely comply with (further) investigation."
Three former STX Group executives, including a 61-year-old suspect surnamed Byun, were also put under arrest on charges of colluding with Kang.
Prosecutors launched a probe into the case in February when the company filed a complaint against five former executives, including Kang.
STX Group, once the country's 13th-biggest conglomerate with a total of 10 affiliates under its wing, has seen its major affiliates struggle from liquidity shortages and mounting debt due to the downturn in the shipbuilding and shipping sectors.
Kang, who began his career as a salaried worker at a cement company, expanded STX Group into one of the country's biggest conglomerates through corporate mergers and acquisitions. (Yonhap)