Mr. Pizza chief expected to spend years in jail

Mr. Pizza founder Chung Woo-hyun must have thought his wealth and social status would be long-lived before he raised public ire for mistreating his employees.

Earlier this week, the prosecution indicted the ex-chairman of MPK Group for allegedly embezzling company funds worth 15 billion won ($13.4 million). MPK Group’s franchise brand is Mr. Pizza.

The scandal erupted last month when a group of Mr. Pizza store owners condemned him for pocketing retail margins by abusing his dominant position. He is accused of unfairly pressing his franchisees, forcing them to sign contracts with certain cheese retail companies run by his younger brother.

The prosecution is widening its investigation into Chung who is also suspected of using the corporate money to provide a luxurious lifestyle for his family.

Chung’s son has also recently made headlines here for paying 200 million won at karaoke bars with a corporate card. The son, who holds the title of MPK Group vice chairman, received a monthly salary of 91 million won from the company despite no involvement in management activities.

In recent questioning by the prosecution, he is known to have said he did not participate in any company affairs at all, having had “no interest” in running the company.

Mr. Pizza is also at the center of public criticism for retaliating against former owners of franchised stores.

When a group of ex-Mr. Pizza franchise owners joined hands to launch a new pizza brand, Chung disrupted their business by opening Mr. Pizza branch stores near the new pizza brand’s stores and selling pizzas at the lowest possible price.

“We have secured a text message saying ‘Mr. Pizza would do its best to kill their business in the initial stage’ sent from a Mr. Pizza executive to Chung,” said Lee Joon-sik, a senior prosecutor at the Seoul Central District Prosecutors’ Office.

“The prosecution obtained enough evidence showing Chung pushed ahead with retaliatory moves against former Mr. Pizza store owners,” he said. “The company opened a series of new stores near those run by the former employees on purpose.”

Against this backdrop, observers predict Chung faces a jail term without probation. In 2015, a former chief of the tteokbokki (spicy stir-fried rice cake) franchise chain, Addal, was sentenced to two and a half years in prison for abusing his power over his affiliated franchise store owners.

He illegally pocketed more than 6 billion won from subcontractors, which supplied tteokbokki.