Ananti CEO Lee Man-kyu, who was brought to trial on charges of violating accounting standards, was acquitted in the first trial.
On May 13, Judge Ryu Jimi of the Seoul Central District Court Criminal Division 5 Single Judge Panel acquitted both CEO Lee and his younger brother, former Ananti CFO Lee Hong-kyu, who had been indicted on charges of violating the Capital Markets Act and the Act on External Audit of Stock Companies.
The court stated, "The Korean International Financial Reporting Standards (K-IFRS) are principle-based, allowing for the selection of the most economically substantive method among possible options, so different accounting treatments may be applied to the same case," and added, "Based solely on the evidence submitted by the prosecution, it is difficult to conclude beyond a reasonable doubt that false financial statements were prepared and disclosed."
The court further noted, "It cannot be considered appropriate for the defendants to have prepared financial statements by recording each amount as advances in a temporary account for an extended period." However, the court continued, "Considering the explanations regarding the scale of the business and related expenditures, as well as the fact that the defendants stated they chose to process the amounts as advances because they believed it would be a greater problem to treat them as expenses, it is difficult to conclude that there was intent to prepare false financial statements."
They were indicted on charges of disguising tens of billions of won in company funds, for which there was no supporting documentation for expenditures in 2015 and 2016, as advances, thereby making it appear as if there were no accounting issues. The prosecution first indicted the former CFO in March 2023 to suspend the statute of limitations, and then additionally brought CEO Lee to trial in April last year.
At the time, the prosecution dropped charges regarding the alleged real estate transaction irregularities with Samsung Life, which had been at the center of suspicions involving Ananti. In April 2009, Ananti purchased land and buildings in Songpa-gu, Seoul, for a total of 50 billion won, and before paying the final balance in June of the same year, entered into a contract to resell the property to Samsung Life for about 97 billion won. There were suspicions that former and current Samsung Life employees had caused losses to the company by purchasing Ananti's real estate at an inflated price. However, the prosecution determined that there was no evidence to suggest that the sale price was unjustifiably high during the transaction in question, and thus dropped charges of embezzlement and breach of trust.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
