Yoon Kyung-rip, CEO of Yuhwa Securities (65), who is accused of purchasing treasury shares through a collusive trading method to reduce inheritance tax, claimed that the charges do not warrant criminal punishment. Collusive trading refers to a transaction in which the seller and buyer prearrange the stock trade, timing, quantity, and price, and then execute the trade accordingly.
At around 10:30 a.m. on the 21st, the Seoul Southern District Court Criminal Division 13 (Presiding Judge Myung Jae-kwon) held the second trial for CEO Yoon and Yuhwa Securities, who are accused of violating the Capital Markets and Financial Investment Business Act. Yoon’s side acknowledged the facts of the prosecution’s charges but argued that legally, the acts do not constitute criminal offenses.
Yoon’s defense stated, "We generally acknowledge the facts, but the defendant’s actions fall under the scope of administrative fines under the Capital Markets Act." Yuhwa Securities also shared the same opinion as Yoon’s side. At the first hearing held on January 26, Yoon’s side did not express their position on the charges, citing that the review of evidence records was not yet complete.
According to the prosecution, from November 2015 to June 2016, CEO Yoon is accused of acquiring approximately 800,000 shares (about 12 billion KRW) of the securities company owned by his father, the late honorary chairman Yoon Jang-seop, through collusive trading. It was investigated that Yoon falsely disclosed that Yuhwa Securities would publicly buy back treasury shares on the securities market and instructed employees to prioritize purchasing the honorary chairman Yoon’s shares.
The prosecution viewed that CEO Yoon committed these acts to reduce the inheritance tax burden and strengthen control over Yuhwa Securities as the elderly honorary chairman Yoon’s health deteriorated. When the largest shareholder of a listed company inherits shares from a related party, inheritance tax is imposed by adding a 30% premium to the stock price for two months.
The next trial is scheduled for 10 a.m. on May 2.
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