Former Minister of Justice Cho Kuk's fifth cousin Jo Beom-dong, who was indicted on private equity fund allegations [Image source=Yonhap News]
[Asia Economy Reporter Seongpil Cho] Jo Beom-dong (37), the fifth cousin of former Minister of Justice Cho Kuk, who was indicted on suspicions related to private equity funds, was sentenced to four years in prison in the first trial.
This is the first judicial ruling on the former minister's family, coming 10 months after the prosecution launched a forced investigation in August last year.
The Seoul Central District Court Criminal Division 24 (Chief Judge So Byeong-seok) sentenced Jo, who was detained and indicted on charges including violation of the Capital Markets Act, embezzlement under the Act on the Aggravated Punishment of Specific Economic Crimes, and breach of trust, to four years in prison and a fine of 50 million won on the 30th.
The court stated, "The prosecution filed the indictment from the perspective that the defendant had a corrupt collusion with political power, but sufficient legal grounds for this part were not confirmed."
This means there is insufficient evidence to view Jo as having illegally increased his assets by using the power of former Minister Cho in connection with the private equity fund suspicions.
However, the court found most of the charges against Jo, including embezzlement, to be guilty.
The court said, "The defendant repeatedly committed crimes such as raising funds through fraudulent means during the process of acquiring companies without capital."
The key issue in Jo's trial was whether he was the actual owner of Coring Private Equity (Coring PE), the private equity fund management company.
The prosecution assumed that Jo was the real owner of Coring PE and indicted him on charges including violation of the Capital Markets Act, embezzlement, and breach of trust.
The logic was that Jo operated Coring PE, acquired the KOSDAQ-listed company WFM without capital, and attempted to boost the stock price through false disclosures.
Additionally, the prosecution's view was that Coring PE embezzled about 7.2 billion won of corporate funds from companies such as WFM and Wells CNT, in which it invested.
The court ruled on that day that "Jo is the actual owner of Coring PE."
Jo claimed that the real owner of Coring PE was Iksung, an auto parts company, but considering the flow of company funds and employees' testimonies, the court found that Jo held decision-making authority at Coring PE.
The court said, "The defendant appears to have performed most of the company's work while using the business card of Coring PE's general representative," and "It cannot be said that Coring PE made decisions on major business matters solely for Iksung's benefit."
Professor Jung Kyung-shim of Dongyang University, wife of former Minister of Justice Cho Kuk / Photo by Jang Jin-hyung aymsdream@
However, the court acquitted a significant portion of the charges in which former Minister Cho's wife, Professor Jung Kyung-shim of Dongyang University, was indicted as an accomplice.
The prosecution applied embezzlement charges, alleging that Professor Jung invested 50 million won in Coring PE in March 2017, and Jo sent about 15 million won monthly until September the following year, guaranteeing returns.
However, the court viewed the financial transactions between Jo and Professor Jung not as "investment" but as "loans." It recognized embezzlement only for about 7.8 million won, half of the 15 million won Jo sent to Professor Jung's side.
Furthermore, the court did not recognize the accomplice relationship, considering the possibility that Professor Jung was unaware of any embezzlement issues related to receiving interest.
Among the conspiracy charges against Jo and Professor Jung stated in the indictment, the court found only the charges of instructing evidence destruction and concealment to be guilty.
This charge mainly concerns the destruction and concealment of related materials after former Minister Cho was nominated as Minister of Justice in August last year, amid successive suspicions about Professor Jung's private equity funds.
The court stated, "Considering that the defendant testified he received a phone call from the accomplice (Professor Jung) saying 'It would be a big problem if my younger sibling's name is revealed' and then caused evidence to be destroyed, it can be recognized that the crime was committed in conspiracy with the accomplice."
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