Junghwan Kim, the managing director of JWT’s Korean operation AdVenture, has been arrested amid an investigation of corruption charges, Campaign reports today.
In an official statement the agency said it had “accepted the resignation of the managing director of JWT AdVenture in connection with an investigation by the prosecutor’s office.” The agency then added that it has also suspended its finance director “pending the outcome of the investigation.”
According to The Korea Times–which did not name JWT AdVenture and referred to Kim solely by his surname–the investigation alleges that the managing director created slush funds worth over one billion won (around $826,000) by exaggerating unit prices in the agency’s contracts with various partners. Prosecutors suspect this money was then used to bribe clients, including tobacco and ginseng producer KT&G. The Korea Times points out JWT AdVenture’s “major contract with the nation’s largest tobacco and ginseng product manufacturer” (KT&G), adding that a former head of the company and another staff member were also arrested due to “their alleged involvement in the process.”
JWT says it is cooperating fully with authorities and has also appointed external auditors to launch its own internal investigation. Kim had served as managing director of JWT AdVenture since 2013 before his “resignation.”
“J. Walter Thompson Asia-Pacific is committed to the highest ethical standards and expects all its employees to abide by these standards,” JWT said in the official statement.
The news, of course, comes in the wake of the discrimination lawsuit filed against global chairman and CEO Gustavo Martinez last week by JWT chief communications officer Erin Johnson.