Prosecution Seeks Prison Sentences for HiteJinro Founding Family and Executives

Vice President Park Taeyoung, Eldest Son of Founder, Sentenced to 2 Years in Prison

[Asia Economy Reporter Seongpil Cho] The prosecution has requested that the court impose prison sentences on the HiteJinro family and management, who were indicted for unfairly funneling work to a specific affiliate.

On the 9th, during the final trial of Park Taeyoung, vice president and eldest son of HiteJinro Chairman Park Mundeok, for violations of the Monopoly Regulation and Fair Trade Act, presided over by Judge An Jaecheon of the Seoul Central District Court Criminal Division 15, the prosecution requested a two-year prison sentence.

The prosecution also requested a one-year prison sentence for CEO Kim Inkyu and a six-month prison sentence with a two-year probation for Executive Director Kim Changgyu. A fine of 200 million KRW was sought against the HiteJinro corporation.

In his final statement, Vice President Park apologized, saying, "I am sorry for causing trouble," and added, "I will strive to become a company that is loved by better complying with the law."

CEO Kim also appealed for leniency, stating, "From now on, I will thoroughly inspect and manage the company to ensure that no unnecessary suspicions arise regarding unfair support to affiliates or any matters related to the Fair Trade Act."

They were indicted on charges of unfairly funneling approximately 4.3 billion KRW worth of work from 2008 to 2017 by inserting an affiliate, in which Vice President Park held the largest stake, into the beer can manufacturing and distribution process through so-called 'pass-through fees.'

HiteJinro supported Seoyoung E&T with personnel costs (500 million KRW), pass-through fees for aluminum coil, a raw material for beer cans (850 million KRW), and pass-through fees for sealed container lids (1.86 billion KRW).

Meanwhile, regarding allegations that indirect support was provided by increasing subcontracting fees to enable Seoyoung E&T to advantageously sell shares of its wholly owned subsidiary Seohae Insight, a court ruling on the Fair Trade Commission's conclusion was issued in February.

In an administrative lawsuit held at the Seoul High Court (Administrative Division 6), the court ruled to cancel the Fair Trade Commission's corrective order, stating that the conclusion that Seoyoung helped sell Seohae Insight shares at 2.5 billion KRW, higher than the fair price of 1.4 billion KRW, "cannot be definitively deemed unfair."

Furthermore, the court concluded that "when only some of multiple violations are illegal and there is no basis to calculate the fine amount based on certain violations, the entire fine payment order must be canceled," thereby annulling the Fair Trade Commission's entire fine payment order.