Police probe Posco Holdings over extravagant board meeting

Police are investigating Posco Holdings over allegations of illegal transactions during a $517,000 overseas board meeting last year, booking 16 directors, including Chairman Choi Jeong-woo, for breach of duty.

Posco Holdings Chairman Choi Jeong-woo attends the 50th-anniversary commemoration of the completion of the first Posco steelworks plant in Pohang, North Gyeongsang at Posco's Pohang headquarters in in July 2023. [YONHAP]

The police have launched an investigation into allegations that Posco Holdings, Posco Group’s holding company, was involved in illegal transactions while gathering for a 680 million won ($517,000) overseas board meeting last year.

Suseo Police Precinct has booked 16 directors, including Posco Holdings Chairman Choi Jeong-woo on breach of duty allegations, authorities said Friday.

The Posco board of directors, including Choi, met in Canada last year from Aug. 6 to 12.

Private law mandated that Posco Holdings pay the full cost of the meeting. But company subsidiaries Posco and Posco Canada are also alleged to have covered some of the expenses.

Posco Holdings paid 350 million won, Posco Canada paid 310 million won and Posco used 20 million won.

Around 100 million won was spent on food costs, while 46.81 million won was used on chartered flights, 169.9 million was used for chartered helicopter flights, 9.85 million won was used on golfing expenses and hotel fees averaged 1.75 million won a night per person.

The police are also looking into the possibility that outside directors who participated in the meeting breached their duties. The allegations are significant in that the outside directors are part of the recommendation committee that will select the next chairman of Posco Holdings.

Posco workers told the Chosun Ilbo that the Canada meeting was intended to entertain the voters who would elect the next chairman. The outside directors who attended the meeting reportedly returned 2.4 million won to the company upon arriving back in Korea after questions were raised about potential misconduct.

“The purpose of the visit to Canada sites was to enhance the board of directors’ understanding,” said a spokesperson for Posco Holdings, adding that “board meetings were regularly held annually at overseas sites except during the Covid-19 pandemic.”

“Outside directors were paid expenses necessary for performing their duties in accordance with the association’s regulations and private regulations,” the company added.

BY KIM JU-YEON [kim.juyeon2@joongang.co.kr]