Former Hallyu Times (formerly Sports Seoul) chairman Lee Mo (44), who fled after diverting Lime Asset Management fund money to cover up management failures, was sentenced to prison. Other associates tried alongside Lee were also consecutively detained in court.
On the 8th, the Seoul Southern District Court Criminal Division 11 (Presiding Judge Jeong Doseong) sentenced Lee, who was indicted for violating the Capital Markets Act and other charges, to 5 years in prison and a fine of 500 million won.
Lee and others are accused of fabricating that they received normal investments from other companies while raising about 26.4 billion won from Lime in May 2019 to resolve the insolvency of the KOSDAQ-listed company Hallyu Times. Lee is also charged with failing to report holding Hallyu Times' stocks under a false name, issuing convertible bonds (CB), and conspiring with other defendants to spread false information such as new business initiatives to inflate the stock price.
The court stated, "Defendant Lee caused this incident by attracting Lime funds related to the refusal of audit opinions for Hallyu Times," and "He conspired with Kang Mo (former chairman of Hallyu Bank) to disseminate false and exaggerated information to raise the stock price." The court added, "He left for the United States in July 2019 and only returned in December 2022, significantly affecting the investigation and trial," explaining the sentencing rationale.
The court also sentenced Kang to 7 years in prison and a fine of 750 million won. The court said, "Kang had previously been sentenced twice to imprisonment for similar offenses, and he decided on investments and issued convertible bonds in consultation with Lee," adding, "Although the fundraising appeared favorable to investors, excessive bond issuance relative to the company's size increased investment risks." It further stated, "After the refusal of audit opinions for Hallyu Times, Kang committed additional crimes to resolve the convertible bond issues and led false media reports," and "He denied the facts or shifted responsibility to other defendants."
Lee Mo, known as the de facto owner of Paxnet, was sentenced to 3 years in prison and fined 300 million won. Lee is accused of embezzling 1 billion won by pretending to lend funds for a Chinese real estate project from Hallyu AI Center and using it arbitrarily. The court judged the 1 billion won as criminal proceeds, noting the lack of objective data on the appropriateness of the Chinese real estate investment and proper collateral acquisition at the time.
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