7 Years and 9 Months After Indictment
Original Sentence of 2 Years in Prison, 3 Years Suspended Confirmed
Only Embezzlement of Approximately 1.6 Billion Won Found Guilty
Cho Hyunjun, chairman of Hyosung Group, who was brought to trial on charges of embezzlement and breach of trust involving more than 20 billion won, has received a final suspended prison sentence from the Supreme Court. This marks the finalization of his sentence 7 years and 9 months after he was indicted in January 2018.
Cho Hyunjoon, chairman of Hyosung Group, who is suspected of creating slush funds, is appearing at the Seoul Central District Prosecutors' Office in Seocho-gu, Seoul on the 17th. Chairman Cho is accused of pocketing slush funds worth 10 billion won under the name of "passage fees" by inserting a ghost company in the process of receiving construction materials./Photo by Kim Hyunmin kimhyun81@
On the 16th, the First Division of the Supreme Court (Presiding Justice Noh Taeak) upheld the previous court's ruling, which sentenced Chairman Cho to two years in prison with a three-year suspension for violating the Act on the Aggravated Punishment of Specific Economic Crimes (breach of trust). Of all the charges, only the embezzlement of approximately 1.6 billion won was found guilty.
The Supreme Court stated, "There was no violation of the rules of logic and experience, nor any misunderstanding of the legal principles regarding the establishment of embezzlement, that would have exceeded the bounds of free evaluation of evidence in the lower court's judgment."
Chairman Cho was accused of causing approximately 17.9 billion won in losses to the group by inflating the value of shares and selling his personal company, Galaxia Electronics (GE), to a group affiliate after the company's listing failed in July 2013, thereby taking on the burden of repurchasing investment shares.
In addition, from 2008 to 2009, he allegedly made Hyosung Art Fund purchase 38 pieces of artwork he owned at inflated prices, obtaining a profit of about 1.2 billion won, and from 2002 to 2012, he was also charged with embezzling approximately 1.6 billion won by falsely hiring an associate as an employee of a Hyosung affiliate and paying them a salary.
The court of first instance found him guilty regarding the art fund and false salary charges and sentenced him to two years in prison, but acquitted him of the GE breach of trust charge. The appellate court overturned the conviction related to the art fund, found him guilty only of embezzlement, and reduced the sentence to two years in prison with a three-year suspension.
Both Chairman Cho and the prosecution appealed, but the Supreme Court dismissed the appeals, stating there was no error in the lower court's judgment. Regarding the breach of trust charge related to the capital reduction with consideration, the Supreme Court stated, "If a capital reduction with consideration is carried out without reasonable cause and creates specific and actual risks to the company, it may constitute a breach of duty by the director."
However, regarding Chairman Cho's capital reduction with consideration, the court accepted the lower court's conclusion that "it is insufficient to regard this as a breach of duty in the course of work" as reasonable.
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