'Seongji Construction Embezzlement' Optimus Fund Fraud Suspects Receive Increased Sentences in Appeals Trial

[Asia Economy Reporter Song Seung-yoon] Defendants involved in the Optimus Asset Management (Optimus) fund fraud case received increased sentences in the appeal trial related to the Seongji Construction embezzlement case. However, fines were significantly reduced.

The Seoul High Court Criminal Division 11-3 (Presiding Judges Hwang Seung-tae, Lee Hyun-woo, Hwang Ui-dong) on the 11th overturned the first trial sentence of 5 years imprisonment, a fine of 25 billion KRW, and a confiscation of 27.8 billion KRW against Park Jun-tak, CEO of MG Partners, who was indicted for violating the Capital Markets Act, and sentenced him to 6 years imprisonment and a fine of 500 million KRW.

Yu Hyun-kwon, advisor of Skin&Skin, who was indicted alongside Park, was sentenced to 3 years imprisonment and a fine of 15 billion KRW in the first trial, but in the appeal trial, he received 4 years imprisonment and a fine of 250 million KRW.

MG Partners, an affiliate of Optimus, acquired convertible bonds (CB) of Seongji Construction to become the largest shareholder, then issued CBs twice for the purpose of financing, falsely disclosing the purpose as "new construction orders," according to investigations.

The first trial court regarded the amount of CB issuance as the profit obtained from Park and Yu's violations of the Capital Markets Act and set the fine accordingly. However, the appeal court judged that it was difficult to see the CB issuance amount as their direct gain. Nonetheless, the court found Park and others guilty of deciding to issue CBs and causing damage to Seongji Construction (breach of trust under the Act on the Aggravated Punishment of Specific Economic Crimes), unlike the first trial.