According to MP Group, Vice Chairman Jung Sun-min’s resignation will be made official at a shareholders meeting to be held in late October.
“It was decided long ago that Vice Chairman Jung would step down, but the official announcement was delayed to put together the shareholders meeting,” said an official with the group.
|Former MP Group Chairman Jung Woo-hyun (Yonhap)|
The company, which operates the pizza chain Mr. Pizza, was embroiled in a scandal when it was revealed that the owner family had overpriced the cheese supplied to franchisees by a company owned by Jung’s family.
Former Chairman Jung was also accused of taking part in other unfair practices such as opening new stores near outlets operated by former franchisees as retribution for withdrawing from MP Group. He is currently in custody, facing trial for embezzling over 9.1 billion won ($8.06 million) from the group and transferring nearly 6.5 billion won in losses to an affiliate company.
He stepped down as chairman in June with a public apology and handed over control of the company to its CEO Choi Byung-min.
However, Choi has been indicted without detention for wrongful interference. He will be replaced by Lee Sang-eun, the head of MP Group’s Beijing corporation.
The company will also increase its number of independent directors from one to two members -- Cha Byung-jik, an attorney with law firm Hankyul, and professor Kim Joong-gyoo of Hoseo University.
The changes in leadership come as MP Group faces potential delisting from the Kosdaq bourse. Last month, the Korea Exchange announced that MP Group would undergo a review for listing eligibility.
Industry watchers speculate that the announcement of leadership changes is aimed at retaining the company’s listing by distancing itself from past practices.
By Won Ho-jung (email@example.com)