Jo Yong-byeong Free from Judicial Risks... Impact on Other Financial Companies

Acquittal Overturns First Trial... No Issue Maintaining Term
Attention on Vice Chairman Ham Yeong-ju's Verdict for Similar Charges

Shin Yong-byeong, Chairman of Shinhan Financial Group, is leaving after the appellate court sentencing hearing held on the afternoon of the 22nd at the Seoul High Court in Seocho-gu, Seoul.
[Image source=Yonhap News]

[Asia Economy Reporter Kiho Sung] With the court's ruling on Cho Yong-byeong, Chairman of Shinhan Financial Group, attention is focused on how it will affect the trial of Ham Young-joo, Vice Chairman of Hana Financial Group. Although there are differences in details, the main issue of recruitment corruption charges is consistent. In the financial sector, cautious predictions suggest that Vice Chairman Ham could face a similar outcome to Chairman Cho.

According to the legal community on the 23rd, the Seoul High Court Criminal Division 6-3 (Presiding Judge Eunrae Jo) acquitted Chairman Cho, who was indicted on charges of obstruction of business and violation of the Equal Employment Opportunity Act, overturning the first trial's sentence of six months imprisonment with a two-year probation.

Chairman Cho had been on trial for allegations of involvement in the fraudulent recruitment of children of bank executives during his tenure as President of Shinhan Bank. Other personnel officers indicted alongside Chairman Cho also received reduced sentences, such as fines or probation.

With the acquittal in the appellate trial, Chairman Cho has almost eliminated judicial risks. According to the Financial Company Governance Act and Shinhan Financial's internal governance regulations, a confirmed sentence of imprisonment or higher, including probation, results in exclusion from executive qualifications for five years. However, with the acquittal, Chairman Cho is expected to maintain his current term scheduled until March 2023 without difficulty.

The acquittal of Chairman Cho is expected to have considerable repercussions on other financial companies facing recruitment corruption allegations, with Hana Financial Group being a representative case. Vice Chairman Ham is accused of similar charges, including accepting recruitment requests and adjusting gender ratios during his tenure as President of Hana Bank.

Even when Chairman Cho was partially convicted in the first trial, recruitment gender discrimination was judged as not guilty. In particular, since the charges brought by the prosecution against Chairman Cho and Vice Chairman Ham are the same?obstruction of business by deception and violation of the Equal Employment Opportunity Act?if the court applies the same standards, similar rulings may be expected.

It is still unknown what judgment the court will make in Vice Chairman Ham's first trial scheduled for next year. The key factor will be the extent of the prosecution's sentencing request. However, in the financial sector, there is cautious speculation that since the charges against Chairman Cho and Vice Chairman Ham are not significantly different, the prosecution's sentencing request will likely be at a similar level.

If the possibility of Vice Chairman Ham's acquittal increases, it will also affect the election of Hana Financial Group's chairman scheduled for next year. A financial sector official said, "Considering Chairman Cho's case, the likelihood of Vice Chairman Ham receiving a not guilty verdict in next year's first trial has increased," adding, "Based on Chairman Cho's trial results, Vice Chairman Ham has somewhat relieved his burden."