[Invest&Law] Large Conglomerate Chairmen Are Still in Trial...

There are quite a few large conglomerate owners and chairpersons currently undergoing criminal trials. Lee Jae-yong, Chairman of Samsung Electronics, appeared at the third appellate hearing of the ‘Samsung Unfair Merger Allegation’ case held at the Seoul High Court in Seocho-dong on the 28th of last month, the day after the second anniversary of his appointment as chairman. Lee was indicted in September 2020 on charges including illegal acts during the merger process of Samsung C&T and Cheil Industries in 2015 to secure management succession. At that time, the Prosecutors' Investigation Review Committee recommended non-prosecution and the suspension of the investigation, but after 67 days of deliberation, the prosecution proceeded with the indictment. On the day of his promotion to chairman in 2022, Lee attended the continued first trial hearing for ‘unfair merger and accounting fraud’ without a separate inauguration ceremony, and he also appeared in court on the first anniversary of his appointment last year. The Seoul High Court Criminal Division 13 (Presiding Judge Baek Gang-jin, Judges Kim Sun-hee and Lee In-su) reportedly announced at the second hearing in July that the verdict is scheduled for January 27 next year.

The case of Heo Young-in, Chairman of SPC Group, who was indicted on charges of instructing the transfer of affiliate stocks at low prices to evade gift tax, is currently pending in the Supreme Court. On September 6, the Seoul High Court Criminal Division 1-1 acquitted Heo of charges of violating the Specific Economic Crimes Act (breach of trust), and the prosecution appealed the decision. This is not the only trial Heo is facing. Heo was also indicted for coercing Paris Baguette bakers to withdraw from the Korean Confederation of Trade Unions and was undergoing trial while in custody. However, on September 12, the Seoul Central District Court Criminal Division 32 (Presiding Judge Jo Seung-woo) granted Heo’s bail request, leading to his release after five months in detention. The 21st hearing of this case was held last week.

Lee Woong-yeol, Honorary Chairman of Kolon Group, has been tied to Seocho-dong for about five years during the first trial process alone. This is because the first trial of Lee and the corporation, indicted on charges including involvement in the manipulation of the components of the osteoarthritis treatment drug Invossa KJ (Invossa), has not yet concluded. The first trial verdict date for Lee, presided over by the Seoul Central District Court Criminal Division 24 (Presiding Judge Choi Kyung-seo), is scheduled for the 29th. The prosecution previously demanded a 10-year prison sentence for the honorary chairman. This will be the first trial result after four years and ten months since the case was filed in January 2020.

Kim Beom-su, founder of Kakao and Chairman of Kakao’s Management Innovation Committee, is also on trial. Kim, who was detained and indicted on charges of stock price manipulation of SM Entertainment, attended the second preparatory hearing under the Seoul Southern District Court Criminal Division 15 (Presiding Judge Yang Hwan-seung). On the 31st of last month, the court granted Kim’s bail request.

Cho Hyun-beom, Chairman of Korea & Company Group, is also undergoing trial at the Seoul Central District Court. Cho, accused of unfair support to affiliates and embezzlement and breach of trust involving approximately 20 billion won, was tried while in custody but was released on bail in November last year after his bail application was approved. Since the case was filed in March 2023, more than 40 hearings, including three preparatory hearings, have been held.

The appellate trial of Park Sam-gu, former Chairman of Kumho Asiana Group, is also underway at the Seoul High Court. The Seoul High Court Criminal Division 2 (Presiding Judge Seol Beom-sik) is hearing Park’s case, who is accused of unfair support to affiliates and embezzlement. At the appellate trial’s sentencing hearing in November last year, the prosecution demanded a 10-year prison sentence, but the defense resumed arguments. Although Park was sentenced to 10 years in prison and detained following the first trial, he was released on bail during the appellate trial in January last year.

Legal News Reporters Park Soo-yeon and Han Soo-hyun