After eight months on the run, a former South Korean business executive accused of corruption and violating sanctions on North Korea has been arrested in Thailand.
55-year-old Kim Seong-tae, the former chairman of the underwear conglomerate Ssangbangwool (SBW) Group, was arrested on Tuesday evening for allegedly overstaying his visa in the Southeast Asian country, Thai police told VICE World News.
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A police spokesperson said Kim has been denied bail and would be investigated for other potential offenses, without elaborating. The current chairman and CEO of SBW Group, Yang Seon-gil, was arrested alongside Kim in the Thai capital Bangkok, the spokesperson said. SBW Group, whose business spans garments and natural resources, declined a request for comment.
Kim fled South Korea on May 31 while under investigation for suspected embezzlement and allegedly violating a ban on unapproved trading with North Korea by smuggling $1.5 million to China in suitcases, which were then allegedly passed on to North Korean officials.
South Korean prosecutors raided SBW Group’s headquarters in October over these smuggling suspicions. In August, prosecutors also sought an Interpol “red notice” for locating and detaining Kim.
The money was used for a deal with the North Korean government involving an underground resource development project in 2019, prosecutors in South Korea have alleged. Prosecutors investigating Kim told a South Korean newspaper he even gave an Hermès saddle to North Korean leader Kim Jong Un—a known equestrian. A saddle from the luxury brand can cost $8,800.
Around the time that Kim and other executives are suspected to have smuggled money into China, SBW group signed an agreement on economic cooperation projects in China with two North Korean groups: the North Korean National Economic Cooperation Federation, North Korea’s foreign economic agency, and North Korea’s Korean Asia-Pacific Peace Committee, which is in charge of cross-border exchanges.
After doing so, an SBW Group affiliate obtained business rights to rare earth elements in North Korea, according to local media reports. Such materials have a wide variety of applications and are used in smartphones, cancer treatment drugs, and aircraft engines.
Business deals between South and North Korea—though not banned—have been limited, due to continuing political and military tensions between the two countries. Under the Foreign Exchange Transactions Act in South Korean law, it’s illegal to conduct transactions with North Korea without prior approval from the government—this can include the transfer of money, goods or technology.
Violating this law can result in a prison sentence of up to three years or a fine of up to 50 million won (about $40,000).
But notably, the two countries collaborated during the Kaesong Industrial Complex, a joint economic development project established in 2004. Located in the city of Kaesong in North Korea, the complex housed factories and other facilities where South Korean companies could manufacture goods using North Korean labor. The project was shut down in 2016 because of strained political ties between the countries.
South Korea has also imposed a number of sanctions on North Korea in response to the country’s human rights abuses and nuclear and missile programs. It bans imports of North Korean goods, prohibits providing financial services to North Korean people, and restricts North Korean citizens from traveling to South Korea.
