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Publication Date : 24-04-2014
The Sewol sinking has opened up a long, shady scandal surrounding the ferry operator’s de facto owner, a 73-year-old mysterious businessman Yoo Byung-eon.
In the 1980s, Yoo established Semo Marine Co. after securing the business rights to operate ferries on the Hangang River, thanks to his reportedly close ties with then-President Chun Doo-hwan.
But the business went bankrupt in 1997 in the wake of a series of highly publicised scandals, including the mass suicide of 32 followers of a Christian cult led by Yoo, who was also a pastor at the time.
In connection with the case and other embezzlement charges, Yoo was sentenced to four years in prison in 1992.
Then, Chonghaejin Marine Co., the operator of the sunken ferry Sewol, was set up in 1999 by taking over ships and assets held by Semo.
Several CEOs have led the company, but its operation has always been under the control of the Yoo family.
It was also Yoo who made the decision to purchase the Sewol, a 20-year-old Japanese ferry, in 2012 and added another deck to increase capacity.
Yoo’s ownership of the company is now succeeded by his two sons, who wield power through a web of company cross-shareholdings.
Currently, Chonghaejin’s largest shareholder is Chonhaiji, a Goseong, South Gyeongsang Province-based manufacturer of shipyard blocks, which owns a 39.4 per cent stake in the ferry company.
A 42.81 per cent stake in Chonhaiji is held by I-One-I Holdings, a holding firm set up in 2007 by the two sons -― Dae-gyun, 44, and Hyeok-gi, 42.
According to Chaebul.com, an online information provider on large businesses, the Yoos own 30 business operators, with 13 doing business abroad such as in the US, Hong Kong and France.
Their combined assets amount to some 500 billion won (US$480 million).
Sources say some of the business funding may have come from money collected by Yoo’s religious followers.
More recently, Yoo has been working as a photographer under an alias, gaining support from his business arms. In 2012, Chonhaiji acquired Ahae Press France, a Paris-based company, to support his overseas exhibitions.
After the sinking of the Sewol, Korean authorities began an investigation into whether Yoo and his two sons were engaged in illicit foreign currency trading or tax evasion while investing in overseas properties.
Facing mounting pressure under the escalating probe, Yoo made a written apology to the victims and their bereaved families on Wednesday, saying the company would come up with a specific settlement proposal soon.