Setback to corruption clampdown in South Korea

The release from jail last week of Chey Tae-won, chairman of SK Corp, three months into a three-years sentence for a multibillion-dollar fraud, might have been expected to cause uproar in South Korea.
Mr Chey, the son-in-law of former South Korean president, was one of 10 directors convicted in June of wide ranging malpractice within SK Group, the country’s third largest conglomerate. The most serious fraud involved SK networks, the trading company previously known as SK Global, which had its accounts manipulated to hide $5.6bn of losses.
Despite his conviction, Mr Chey kept his position as chairman of SK Corp, the group’s oil refining arm, and is widely expected to return to management, perhaps unofficially at first, after completing a spell in hospital to recover from prison.
Son Kil-seung, who received a suspended prison sentence for his part in the fraud also kept his position as chairman of SK Group and head of the Federation of Korean Industries, South Korea’s business lobby group.
“It sends a strange signal to the outside world when the leader of Korea’s business community is a convicted criminal, while Chey Tae-won is released from jail after three months and will apparently be allowed to re-enter management,” said a western financial consultant in Seoul.
The outcome of the battle between sovereign and Mr Chey will help determine whether foreign investors have any more power than South Korea’s courts to challenge the country’s mighty chaebol.