Supreme Court Confirms Original Verdict of Not Guilty... Complete Resolution of Judicial Risk
[Asia Economy Reporter Yu Je-hoon] A green light has been turned on for Cho Yong-byeong, Chairman of Shinhan Financial Group, to secure a third term. The Supreme Court confirmed his acquittal on charges related to recruitment corruption of new employees at Shinhan Bank, completely resolving the judicial risks that had persisted for the past four years.
According to the financial sector on the 30th, the Supreme Court's 2nd Division (Presiding Justice Lee Dong-won) upheld the lower court's acquittal ruling in the appeal trial of Chairman Cho, who was indicted on charges including obstruction of business. Chairman Cho was indicted in October 2018 on charges of managing lists of applicants who received external requests and children of Shinhan Bank executives and department heads from 2013 to 2016, providing preferential treatment during the recruitment process, and adjusting scores to meet the male-to-female acceptance ratio.
The judgments of the first and second trials were divided. The first trial court found Chairman Cho guilty of obstructing recruitment work by informing the HR department of the application status and personal relationships of three specific applicants while serving as Shinhan Bank president, sentencing him to six months in prison with a two-year probation.
On the other hand, the second trial court acquitted him. It was difficult to exclude reasonable doubt that two applicants suspected of involvement in the recruitment process might have passed through legitimate procedures, and in the case of another applicant who appeared to have fraudulently passed the document screening, it was difficult to acknowledge Chairman Cho's involvement.
Thus, Chairman Cho has completely shaken off the judicial risks that lasted for four years. Under the current 'Act on the Governance of Financial Companies,' those sentenced to imprisonment or higher lose their qualifications as financial company executives for five years, but this final ruling has resolved such risks.
In the financial sector, it is highly likely that Chairman Cho, whose term expires in March next year, will embark on a full-fledged third term bid. Since 2017, Chairman Cho has launched or acquired Shinhan REITs Management, Orange Life, Neoplux, BNPP Cardif Insurance, and others, expanding the portfolio as a comprehensive financial company, and based on this, Shinhan Financial posted a record net profit of over 4 trillion won (4.0193 trillion won) last year for the first time.
A financial sector official said, "Not only has the judicial risk been completely resolved in the final trial, but there are no obstacles in terms of age or performance," adding, "Considering that the agenda passed smoothly despite opposition from the National Pension Service and proxy advisory firms during the 2020 reappointment, the possibility of a third term challenge becoming a reality is high."
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