Aricell CEO arrested in first case under industrial accidents law

Aricell CEO Park Soon-kwan is escorted to a detention center after attending an arrest warrant hearing on Wednesday. (Yonhap)

The chief executive of lithium battery manufacturer Aricell and his son, who oversees factory operations, have been arrested over the deadly fire at the company’s Hwaseong plant that claimed the lives of 23 -- 17 Chinese nationals, five Korean nationals and one Laotian national.

The incident marks the first time a company head has been formally arrested under the Serious Accidents Punishment Act, which came into effect in January 2022. The law mandates a minimum prison sentence of one year or fines of up to 1 billion won ($747,372) for owners or CEOs found responsible for industrial accidents.

The Suwon District Court issued arrest warrants Wednesday night after a hearing on allegations against the two.

CEO Park Soon-kwan is accused of violating the Serious Accidents Punishment Act, the Occupational Safety and Health Act, and the Act on the Protection of Temporary Agency Workers. His son, Park Joong-eon, head of factory management, faces charges under the latter two acts. The court described the charges as "grave" when issuing the warrants.

The court, however, rejected the warrant to arrest two other officials -- the safety and health manager at Aricell and the manager of Maycell, the alleged company that had directly hired the workers -- saying they posed no risk of fleeing or destroying evidence.

Announcing the court's decision, Gyeonggi Labor Office chief Kang Woon-kyung on Thursday said, "The accident, which resulted in the tragic loss of 23 lives, occurred due to the neglect of worker safety in favor of saving time and costs."

"We will rigorously investigate any workplace where serious accidents occur due to safety neglect, ensuring strict adherence to the law and established principles," Kang added.

The Ministry of Employment and Labor earlier sought pretrial detention warrants for Park and his son on Aug. 23 following an investigation with police investigators.

The investigation found that Aricell had passed quality inspections by continuously manipulating test samples since it started supplying battery products to the military in 2021. The company's products eventually failed to meet the national defense standards in a quality test in April this year, authorities said.

The company fraudulently passed military quality checks, securing lucrative contracts. To meet unrealistic production targets, it significantly increased daily output without the necessary safety precautions, employing 53 untrained temporary workers hired by Maycell, allegedly a labor dispatch company, under unsafe conditions.

In addition, the evacuation route had been poorly constructed, with the emergency exit installed in the opposite direction of the fire escape route, and safety training for workers had not been conducted, according to authorities.

The devastating fire, triggered by a lithium battery explosion on June 24, took firefighters until the next morning to extinguish. It resulted in the deaths of 23 workers -- the majority of whom were day laborers of foreign nationality -- and injured eight others. Of the 17 Chinese nationals who passed away in the fire, they ranged in age from 23 to 48, 12 were women and many were ethnic Koreans.

Meanwhile, Korean conglomerate Young Poong Group's zinc smelter saw its Seokpo facility CEO, Park Young-min, face legal action, marking the second CEO formally arrested under the Serious Accidents Punishment Act within two days. On Thursday, Park, the head of the smelter in Seokpo village, Bonghwa County, North Gyeongsang Province, was arrested for violating the Serious Accidents Punishment Act. The facility had experienced three fatal accidents in the past nine months.

By Lee Jaeeun(jenn@heraldcorp.com)