Lead, a KOSDAQ-listed company, accused of embezzling hundreds of billions of company funds after acquisition
Court: "The company's management has abandoned the duties and responsibilities they must uphold"
Victims of Lime Asset Management funds held a press conference on the 21st in front of the Seoul Southern District Prosecutors' Office in Yangcheon-gu, Seoul, urging "prompt investigation by the prosecution." The victims filed a complaint with the Seoul Southern District Prosecutors' Office against the head of Daishin Securities Banpo WM Center on charges including fraud under the Act on the Aggravated Punishment of Specific Economic Crimes and fraudulent trading under the Capital Markets Act. Photo by Yoon Dong-ju doso7@
[Asia Economy Reporter Yoo Byung-don] Park Mo, former vice chairman of Lead, a KOSDAQ-listed company, who was indicted for embezzling hundreds of billions of won in company funds in collusion with former Lime Asset Management Vice President Lee Jong-pil, was sentenced to 8 years in prison in the first trial.
The Criminal Division 12 of the Seoul Southern District Court (Chief Judge Oh Sang-yong) held the first trial sentencing hearing at 10 a.m. on the 24th for six defendants, including former Vice Chairman Park, who were charged with violating the Act on the Aggravated Punishment of Specific Economic Crimes (embezzlement), and delivered the sentence.
The court stated, "Due to the defendant's embezzlement, Lead, which was a sound company, suffered a significant loss of approximately 85 billion won, and not only Lead's employees and minority shareholders but also companies that trusted and transacted with Lead suffered enormous damages that cannot be quantified in money," adding, "Such acts represent a breach of the fiduciary duties that must be upheld by company executives and officers, and the nature of the crime is serious and grave."
Additionally, the court sentenced five current and former Lime executives who were indicted together to prison terms ranging from 3 to 4 years. Two individuals with lesser involvement were sentenced to 3 years in prison and 4 years of probation.
They were indicted on charges of embezzling approximately 80 billion won in company funds after acquiring Lead, which was listed on KOSDAQ, through a KONEX-listed company A in 2016.
Lime began investing about 20 billion won in Lead in three installments from January to June 2017, and by 2018, had invested a total of approximately 60 billion won.
In particular, Lead invested 23 billion won outside the company from the 44 billion won raised through a paid-in capital increase in 2017, and the funds were found to have been used to redeem funds from Lime Asset Management's funds. The prosecution judged this act as embezzlement.
Furthermore, as the prosecution additionally uncovered allegations that former Vice President Lee led the mismanagement of the funds, this ruling is expected to have a considerable impact on the investigation into the Lime incident.
Former Vice President Lee was revealed to be involved in this case and had an arrest warrant issued, but he absconded after failing to appear at the pre-arrest detention hearing in November last year and was apprehended by the police on the 23rd.
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