Posco said Monday that it will take legal actions against a former employee who has been at the center of a group accusing its chief nominee over alleged embezzlement and dereliction of duty.

The steelmaker, in a rare statement, said the former worker who identifies himself as a whistleblower, was spreading false information, defaming not only the chairman-designate but also everyone at Posco. The company will file both a civil and criminal suit to the prosecution against him, saying the former worker has made similar accusations before.

The statement came hours after a joint press conference between civic groups and Rep. Choo Hye-sun of the minor Justice Party accusing Choi Jeong-woo, nominee for Posco’s chairman post, of alleged embezzlement and dereliction of duty. Questioning his quality as a leader for the nation’s largest steelmaker, they claimed that Choi was “deeply involved” in allegedly corrupt cases of the company.

They accused Choi of neglecting his duty as the chief of audit at the company in 2011, for not ringing an alarm when the company purchased an Ecuadorian company and a British paper company at a higher than market price. When he served as a chief finance officer in 2016, the two were sold back at a giveaway price, inflicting huge damage to the company, the group claimed. They also raised suspicions that he had close ties with two former governments led by former presidents Lee Myung-bak and Park Geun-hye who are both in jail on charges of bribery and corruption.

Posco said accusations are all incorrect considering the timeline of Choi’s post at Posco's construction arm, Posco E&C. He served the post between 2008 and 2010, years before the company’s acquisition of the two companies -- Santos CMI and EPC Equities -- took place in 2011.

On the accusation of Posco’s succession council and its alleged ties with the previous Park Geun-hye administration, the company said the independent body was launched in 2009 and that former President Park seized power in 2013.

The allegations came two weeks after Choi was picked by the company’s succession council after weeks of screening and an interview process. Choi currently serves as the CEO of the steelmaker’s lithium making unit Posco Chemtech. His nomination is subject for shareholders’ approval as well as the board. An interim shareholders’ meeting will take place on July 27.

By Cho Chung-un (christory@heraldcorp.com)