Sentencing of Lee Jong-pil in First Trial on 29th... Lime Trial Reaches Turning Point

Most First Trial Sentences for 청 Administrative Officer and Others
Yoon Gap-geun Appears in Court for First Time on Bribery Allegations

[Image source=Yonhap News]

[Asia Economy Reporter Yoo Byung-don] The legal battle related to the Lime Asset Management scandal, which caused damages worth approximately 1.6 trillion KRW, has reached a turning point.

The Criminal Division 12 of the Seoul Southern District Court (Presiding Judge Oh Sang-yong) will hold a sentencing hearing at 11 a.m. on the 29th for former Lime Vice President Lee Jong-pil, who was indicted on charges including violation of the Act on the Aggravated Punishment of Specific Economic Crimes (bribery). On the same day, the court will also conduct the sentencing for Lime CEO Won Jong-jun, who was indicted on charges including violation of the Capital Markets and Financial Investment Business Act.

Former Vice President Lee is accused of causing approximately 90 billion KRW in damages to the company by using a ‘Ponzi scheme’ method, purchasing bonds of a company invested in by Lime funds at inflated prices using other fund money after the company suffered losses. The prosecution requested the court to sentence Lee to 15 years in prison, a fine of 3 billion KRW, and a confiscation order of about 1.44 billion KRW. Additionally, the prosecution sought a 10-year prison sentence and a 500 million KRW fine for CEO Won.

Among those indicted in connection with the Lime scandal, many have already been sentenced to prison terms in the first trial. Former Daishin Securities Center Head Jang, who falsely explained returns and risks to enroll 470 investors in 17 funds, was sentenced to two years in prison in the first trial. Former Shinhan Financial Investment PBS Business Division Head Shim, who concealed the intention of ‘fund Ponzi schemes’ and sold Lime trade finance funds, was sentenced to eight years in prison. Former Blue House administrative officer, who was indicted for receiving money in exchange for leaking internal information from the Financial Supervisory Service to Kim Bong-hyun, former chairman of Star Mobility and the de facto owner of Lime, was sentenced to four years in prison.

[Image source=Yonhap News]

Key figures such as former Chairman Kim Bong-hyun and Lee Kang-se, president of Gwangju MBC, are still undergoing trials, and additional indictments by the prosecution continue during the investigation process. Former Daegu High Prosecutor’s Office Chief Prosecutor Yoon Gap-geun, who was named as a lobbying target by former Chairman Kim, will appear in court for the first time at 2 p.m. on the 27th. Yoon is suspected of meeting with the president of Woori Bank to request the resale of Lime funds and receiving bribes amounting to over 200 million KRW. Yoon strongly denies the charges against him.

Furthermore, the prosecution recently indicted Daishin Securities and Shinhan Financial Investment corporations for selling Lime Asset Management funds. These corporations are accused of failing to prevent the crimes committed by former Center Head Jang and former Division Head Shim and neglecting their duty of care and supervision. The prosecution stated, "This is the first case where criminal responsibility has been imposed on sales corporations (legal entities) regarding fraudulent transactions and incomplete sales of ‘funds.’"