Supreme Court Overturns and Remands Kim Jungkyu Tire Bank Chairman's 'Name Lending Tax Evasion' Case

Three Years in Prison and 14.1 Billion Won Fine in Second Trial
Partial Dismissal Recognized

The Supreme Court has overturned the lower court's ruling that sentenced Kim Jungkyu, Chairman of Tire Bank, to prison for allegedly evading tens of billions of won in taxes by disguising the ownership of dealerships.

Kim Jungkyu, Chairman of Tire Bank. Photo by Yonhap News

The First Division of the Supreme Court (Presiding Justice Shin Sookhee) on January 8 overturned the previous verdict that sentenced Chairman Kim to three years in prison and a fine of 14.1 billion won for violating the Act on the Aggravated Punishment of Specific Crimes (Tax Evasion), and remanded the case to the Daejeon High Court.

The court explained the reason for the remand, stating, "The lower court overlooked the fact that the charge of evading comprehensive income tax for the years 2009 and 2010 should have been dismissed due to the expiration of the statute of limitations." However, the court rejected other grounds for appeal and upheld the lower court's judgment on those points.

Chairman Kim was accused of using a so-called "name lending" scheme, disguising Tire Bank dealerships he owned as if they were operated by employees or relatives, thereby dispersing business income and evading about 3.9 billion won in comprehensive income tax. He was also accused of issuing and receiving false tax invoices by pretending to have received consignment sales services from dealership owners who were in fact de facto employees, and of evading about 90 million won in capital gains tax on stock transfers.

Previously, the first trial court sentenced Chairman Kim to four years in prison and a fine of 10 billion won. However, he was not taken into custody in court to protect the defendant's right to defense.

The appellate court also found Chairman Kim guilty. However, it reduced his prison sentence to three years while increasing the fine to 14.1 billion won.

Meanwhile, the previous verdict imposing a fine of 100 million won on the Tire Bank corporation was finalized on the same day.