Hong Won-sik, former chairman of NAMYANG DAIRY PRODUCTS, acknowledged some charges of embezzlement and rebates in his first formal trial over allegations of embezzlement and breach of trust amounting to over 20 billion won.
On the 18th, the 21st Criminal Division of the Seoul Central District Court, presided over by Director General Heo Kyung-moo, held the first hearing for Hong and four others who were indicted and detained on charges of violating the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (breach of trust and embezzlement) starting at 2 p.m.
On that day, Hong entered the courtroom wearing a green prison uniform with his hands clasped behind him. His white mask covered the entirety of his face below the eyes, and he was not wearing his glasses that he usually uses in public settings. Hong was detained on Nov. 28 of last year.
Earlier, prosecutors noted that from 2000 to April 2023, Hong caused a loss of 17.1 billion won to NAMYANG DAIRY PRODUCTS through the insertion of intermediary companies and cash rebates, leading to his detention and indictment in December last year. He is also accused of receiving about 4.3 billion won in rebates from four trading companies and having his cousin employed by a supply company to receive a salary of 600 million won.
Hong is also facing allegations that during the COVID-19 pandemic, he intervened in advertising for NAMYANG DAIRY PRODUCTS' 'Bulgaris' product, claiming it had effects against COVID-19, and that he destroyed evidence once the investigation began.
During the trial, Hong's side stated that they acknowledge part of the allegations regarding embezzlement and rebates 'except for those that are beyond the statute of limitations.' In contrast, they denied the allegations related to the advertisement law violation regarding Bulgaris, saying, 'We were merely discussing research results, and we had no intention of promoting the product.'
Meanwhile, during the trial, it was claimed that Hong dismantled the internal legal audit team while committing the offenses. A NAMYANG DAIRY PRODUCTS employee, identified only as Mr. A, testified, 'I understand that Hong Won-sik dismantled the internal legal audit department around July 2019.' Mr. A participated in the audit conducted after Hahn & Company acquired NAMYANG DAIRY PRODUCTS in August last year, where the allegations of Hong's breach of trust and embezzlement were revealed.