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[Newsmaker] Former GE man tapped to salvage troubled CJ

Lee Chae-wook
Lee Chae-wook
CJ Korea Express vice chairman Lee Chae-wook has been appointed chief executive of CJ Corp., the de facto holding firm of the embattled CJ Group.

The conglomerate’s Oct. 8 personnel overhaul is drawing wide interest as the 67-year-old businessman joined CJ Group only six months ago when CJ LNS merged with Korea Express.

According to market insiders, the appointment comes as an emergency measure after group chairman Lee Jay-hyun was arrested in July on charges of amassing slush funds and evading taxes.

Over the past three months, CJ has operated a five-member emergency management board under the chairmanship of Lee Jay-hyun’s uncle Sohn Kyung-shik. Sohn, who was the chairman of the Korea Chamber of Commerce and Industry, has worked as co-chairman of CJ together with his nephew.

CEO nominee Lee Chae-wook was one of the five members. In January 2013, he stepped down from the post of CEO of Incheon International Airport Corp., though his official term was scheduled to expire in September.

Lee, who had also worked as Asian chief of General Electric, took office to lead the nation’s main gateway in 2008. He was reappointed twice on his strong performance.

On July 1, the Seoul Central District Court detained chairman Lee on charges of evading some 70 billion won ($63.6 million) in taxes by amassing slush funds and misappropriating 100 billion won in company money.

The group chief is also accused of inflicting financial losses worth 35 billion won on the group by fraudulently purchasing two buildings in Tokyo. In August, Lee was temporarily released from detention to undergo a kidney transplant for chronic renal failure.

As a result of the leadership vacuum, the conglomerate has faced a huge setback in its overseas projects.

CJ Cheil Jedang has stopped negotiations to take over a Chinese manufacturing firm and experienced a delay in talks for animal feed business with Chinese and Vietnamese firms. CJ Korea Express has halted its talks for a business partnership with a U.S. company.

By Kim Yon-se (kys@heraldcorp.com)
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