Famous S. Korean novelist sued over defamation

[Ferry Disaster] Prosecutors detain ferry firm CEO

Chonghaejin owner family, aides face arrest

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Published : 2014-05-08 21:19
Updated : 2015-05-27 16:01

Investigators on Thursday detained the CEO of the Sewol’s operator as they sought to uncover the cause of the ferry accident.

Chonghaejin Marine Co. CEO Kim Han-shik was detained at his house in Bundang, Gyeonggi Province, after the court issued a warrant late Wednesday, officials said.

Charges against Kim include manslaughter, negligence and violation of the Ship Safety Act.

The prosecution also detained an auditor surnamed Park working for I-One-I Holdings ― a subsidiary of Semo Group ― and summoned a man surnamed Kim, an auditor of Damanda Co., a sales unit of Semo.

Four management-level staff of the firm have already been arrested, making Kim and Park the fifth and sixth Chonghaejin officials to be detained since the accident occurred on April 16. A total of 19 people are currently in custody related to the sinking.

Prosecutors also requested warrants to detain key figures linked to the owner of the Sewol’s de facto operator in a widening investigation into corruption allegations against the firm. 
Members of a parents’ organization hold candles in place of carnations in remembrance of the Sewol tragedy victims during a Parents’ Day rally in Seoul on Thursday. (Park Hyun-koo/The Korea Herald)

The suspected aides are Semo Group chairman’s son Yoo Hyeok-gi, former Moonjin Media chief Kim Pil-bae and Hankook Pharma chief Kim Hye-kyung, who have ignored investigators’ ultimatum to return to Korea to appear for the summons. Chonghaejin, Moonjin Media and Hankook Pharma are subsidiarys of Semo Group.

Prosecutors also requested a warrant for the former chairman’s daughter Sum-na, who is assumed to be in the country.

“We regret that they did not turn themselves in and that disadvantages will inevitably follow,” an official from the prosecution said. “We will immediately proceed with invalidating their passports and seek help to extradite the three staying abroad.”

The focus has also shifted to the mysterious relationship between Chonghaejin and former Semo Group chairman Yoo Byung-eon.

The investigation team on Thursday revealed an emergency contact list held by the shipping company that suggested Yoo was the de facto chief of Chonghaejin.

In the document, which was seized during a raid last month, Yoo is described as chairman, according to investigators.

The prosecution believes that Kim may have been implicated in Yoo’s alleged embezzlement and tax evasion, an accusation the company has denied.

Prosecutors also found that Yoo received tens of millions of won every month as an adviser to the company, and gave orders related to its business operations.

“We’re open to all possibilities regarding the direction of the investigation into Kim,” an official from the special investigation team told media.

Legal experts say Yoo could be charged with manslaughter if he is found to have been directly involved in the company’s poor management of the ferry.

Executives of the Sampoong Department Store were convicted of manslaughter after the building collapsed in 1995, killing more than 500 people. Prosecutors successfully argued that the executives’ poor approach to construction and overall maintenance had caused the accident.

Public opinion on the government’s investigation remains lukewarm. After the government appeared to have bungled its response operations and handling of the bereaved families, the country’s major newspapers expressed regret over the state’s bureaucratic system, reflecting a possible breakdown in public trust.

In an effort to contain the situation, the Ministry of Oceans and Fisheries said Thursday it will cancel the license of Chonghaejin for the Incheon-Jejudo Island route.

The ministry added that it will pressure the operator to voluntarily drop licenses for two more routes ― the Incheon-Baengnyeongdo Island and Yeosu-Geomundo Island routes.

By Suk Gee-hyun (monicasuk@heraldcorp.com)

* Pursuant to an order by the Press Arbitration Commission, we have been asked to publish the following statement from the Evangelical Baptist Church (EBC).



Evangelical Baptist Church (“EBC,” the “Salvation Group”*) and Mr. Yoo Byung-eun Related Corrections and Official Statement by EBC


After the April 16, 2014 Sewol ferry tragedy, the media published a flood of indiscriminate articles regarding the EBC (also known as Guwonpa* in Korean) and Mr. Yoo Byung-eun. Due to the immense volume of articles, it is impossible to correct and counter every single one. Therefore, in agreement with the EBC and the surviving family of Mr. Yoo Byung-eun, we are publishing the following combined corrections and Official Statement by EBC.


* This label, which is translated as the Salvation Group, has been applied disparagingly to the Evangelical Baptist Church

1. In regards to the claims that Mr. Yoo Byung-eun was the owner of the Sewol ferry vessel and the owner and Chief Executive Officer of Chonghaejin Marine Ltd (“Chonghaejin”) and its affiliated companies


The majority of the media reported that, as the owner of the Sewol ferry, Mr. Yoo Byung-eun directly managed Chonghaejin and its affiliated companies and that he used operating funds for personal purposes. However, Mr. Yoo retired from his executive management position in 1997. He did not own any shares in the noted companies, nor had he managed operations, nor used the operating funds for personal reasons. He was not the owner of the Sewol ferry, nor the Chief Executive Officer of Chonghaejin. As such, he had not provided any directives in regards to the overloading of the Sewol ferry or its renovation (e.g. expansion of the cabins and cargo area).  


2. In regards to the reports of Mr. Yoo Byung-eun’s accumulation of illicit funds and lobbying of lawmakers


Although some media outlets reported that Mr. Yoo Byung-eun had established favorable relationships by paying bribes to politicians, Korean Prosecutors’ Office verified last October that reports of such bribery activity were false. We hereby correct all articles pertaining to this matter.


3. In regards to the allegations of Mr. Yoo Byung-eun’s asset holdings in other people’s names and misappropriation of offerings made to the EBC


The majority of the media reported that Mr. Yoo Byung-eun was a wealthy billionaire who owned real estate properties, including Geumsuwon, both in Korea and abroad under other people’s names and that he diverted the tithes and offerings made to the EBC to an illicit fund and expanded his businesses.


The EBC has confirmed that reports of his wealth incorrectly included real estate properties owned by farming associations, which had been established by church members. Thus, these reported properties were not held by Mr. Yoo Byung-eun in another person’s name, but are owned by the noted farming associations.


Additionally, Mr. Yoo did not embezzle from the EBC nor did he expand his businesses by diverting tithes or offerings of the pertaining church and its members into an illicit fund.


4. In regards to the reports related to Mr. Yoo Byung-eun’s position within the EBC


The EBC has stated that Mr. Yoo Byung-eun was not a religious sect leader. Although he was ordained as a pastor in the 1970s by missionaries at the Far East Broadcasting Company, he did not serve as a pastor. There is no pastor in the EBC, since it is a congregation of laymen.


It was also verified that Mr. Yoo Byung-eun did not participate in the official

process to register EBC as a church in 1981, nor had he been revered as a religious sect leader or been made into a God-like figure by the pertaining church or its members.


5. In regards to reports that the EBC is a cult and that it has false doctrines


The majority of the media reported that the EBC is a religious cult and that it preaches doctrines that are not consistent with Christianity. There are certain churches in Korea that call the EBC a cult, solely based on differences between their and the EBC’s doctrines. However, the EBC has affirmed its belief in the Bible, the Trinity, Jesus’ conception by the Holy Spirit, His birth, death, and resurrection. The EBC does not worship a particular individual as a religious sect leader or preach any doctrine that contradicts the Bible.


6. In regards to reports that Lee Yong-wook, a senior Coast Guard official, and the Sewol ferry crew, including Captain Lee Jun-seok, are members of the EBC, and that the EBC managed Chonghaejin


It was verified that the captain and the crew members who abandoned the ship at the time of the Sewol ferry accident are not members of the EBC. Only two people have been confirmed as members of the EBC: the late Jeong Hyun-seon, who died while evacuating passengers and thus was designated a national hero, and another person, who had been rescuing passengers and was himself later rescued in an unconscious state. It has also been verified that the EBC does not own any shares of Chonghaejin and that it did not engage in its management. Furthermore, the EBC has stated that Lee Yong-wook, a senior Coast Guard official, has not attended the EBC for the past 15 years.


7. In regards to reports of Mr. Yoo Byung-eun’s attempt to flee the country by ship, reports of his seeking asylum and reports of his possession of firearms


The majority of the media reported that Mr. Yoo Byung-eun attempted to flee the country by ship, that he requested asylum in several countries but was rejected, and that he possessed firearms to protect himself. The prosecutors hastily announced without confirming the facts that Mr. Yoo Byung-eun attempted to seek asylum. However, two months later on August 18, the prosecutors revised their statement noting that “upon investigation into the identity of the caller, a person with no relation to the Salvation Group had placed a prank call.” In addition, there was no evidence of any attempt by Mr. Yoo to flee the country. It has also been confirmed that the firearms alleged to be in his possession were collectibles. Furthermore, not only were they collectibles that could not be operated they were also not in his possession while he was fleeing.


8. In regards to reports on allegations about the EBC’s and Mr. Yoo Byung-eun’s links to the Odaeyang incident and their relationship with the Fifth Republic of Korea


Some news articles created the impression that the EBC and Mr. Yoo Byung-eun were behind the Odaeyang mass suicide incident. Some also reported that Mr. Yoo Byung-eun had been able to rapidly grow the Semo Group in the 1980s (e.g. securing the business rights to operate the Han River Ferry Cruise) by using a connection with Mr. Chun Kyung-hwan and a close relationship with the former President Chun Doo-hwan’s Fifth Republic of Korea. However, the Odaeyang mass suicide incident was thoroughly investigated by the prosecution and the police three times—in 1987, 1989, and 1991. All three investigations concluded that the EBC and Mr. Yoo Byung-eun had no connection to the incident. Also, neither Mr. Yoo Byung-eun nor the EBC had any collusive ties with the Fifth Republic of Korea. All of this was verified in the official document issued from the Incheon District Prosecutors’ Office on May 21, 2014.


9. In regards to reports alleging that Mr. Yoo Byung-eun held photography exhibitions at the world’s top museums by donating funds and that he coerced purchases of his artworks


The artwork of Ahae (Mr. Yoo Byung-eun) was examined and authorized for exhibitions at renowned museums and exhibition sites in the United States and Europe by their screening committees. The exhibitions were unrelated to donations, and it was confirmed that there was no causal relationship between Ahae’s donation history and the exhibitions. Moreover, Mr. Yoo’s photography exhibitions were authorized by the committees after the directors of the respective museums had acknowledged the artistic value of Ahae’s works and subsequently proposed hosting the exhibitions. It has been confirmed that the exhibitions were not a result of Mr. Yoo’s patronage or donation. Additionally, the above museums have verified that an exhibition can never be authorized unless the artistic value of an artist’s works is recognized by the screening committee, irrespective of the amount of money an artist donates.

Additionally, it was reported that Mr. Yoo coerced Chonghaejin and its affiliates to purchase his photos at inflated prices. However, this has been confirmed to be false.


Lastly, the Evangelical Baptist Church has released the following statement to the media:


“We sincerely request of the press to serve the public’s right to know with objective and balanced reporting, guarding against biased arguments from its interviewees, all the while fulfilling its duty and responsibility to create no victims from such reporting.


We ask the press to reflect upon its manner of reporting on the Sewol ferry accident. Without waiting for the truth to be revealed through the completion of the investigative and judicial process, the reporting largely focused on releasing exclusive and sensational news reports, which led to misleading the public and essentially conducting a trial in the court of public opinion. We also ask the press to avoid compromising the democratic principles of a constitutional state and to prudently take strict precautions against those forces that aim to take advantage of this period of heartbreak for this nation in order to advance their own position and authority.”