A Seoul court on Monday issued an arrest warrant for Cho Young-tak, CEO of IMS Mobility, who is accused of soliciting investments by leveraging his connections to first lady Kim Keon-hee.
Judge Lee Jeong-jae of the Seoul Central District Court approved the warrant, citing concerns over potential destruction of evidence. Cho faces charges including violations of the Act on the Aggravated Punishment of Specific Economic Crimes related to embezzlement and breach of trust.
The court had rejected an earlier warrant request filed by the special counsel in early September. Following additional investigation, prosecutors made a second attempt to secure Cho's detention and succeeded.
The special counsel is investigating the so-called "butler gate" allegations, in which IMS Mobility—a company whose establishment allegedly involved Kim Ye-sung, identified as a butler figure for the first lady's family—is suspected of receiving 18.4 billion won in improper investments from major conglomerates.
Of the 18.4 billion won raised by IMS Mobility, 4.6 billion won was reportedly used to purchase existing shares of IMS Mobility held by Innovest Korea, a company known to be a shell corporation under Kim Ye-sung's name.
In media interviews before returning to Korea, Kim Ye-sung claimed that of the 4.6 billion won, approximately 3.5 billion won was lent to Cho, while the remaining 700 million won was spent on taxes and other expenses.
Cho has maintained that "the 3.5 billion won was used to repay personal debts through a legitimate loan agreement," adding that "as the company faced difficulties, I had accumulated significant personal debt, and all transactions have clear contracts and account records."
The special counsel continues to investigate the butler gate scandal allegedly involving Cho and others, but has reportedly yet to establish any direct connection to the first lady. With Cho now in custody as a key figure in the case, the investigation is expected to gain momentum.
