Jo Beom-dong: "The money received from Jeong Gyeong-shim was a loan... I didn't know embezzling company funds was a crime"

[Image source=Yonhap News]

[Asia Economy Reporter Seongpil Cho] Jo Beom-dong, the fifth cousin of former Minister of Justice Cho Kuk, who was indicted on charges of illegal private equity fund investment, reiterated that the money he received from Professor Jeong Gyeong-sim of Dongyang University was a 'loan' rather than an 'investment.'

During the continuation trial on the 11th at the Seoul Central District Court Criminal Division 24 (Presiding Judge So Byeong-seok) regarding Jo's charges of violating the Act on the Aggravated Punishment of Specific Economic Crimes (embezzlement), defendant questioning was conducted.

When the prosecution asked, "Did Professor Jeong hand over money under the pretext of private equity fund investment?" Jo replied, "It was a loan, not an investment." He repeated the stance he had maintained so far.

In Jo's trial so far, the prosecution and defense have fiercely disputed whether the money Professor Jeong paid to Korink PE through Jo was investment capital or a loan.

The prosecution views this money as investment capital and considers the 8.6 million KRW that flowed monthly to Professor Jeong under the name of consulting fees as the embezzled amount.

On the other hand, Jo's side has claimed that the interest on the loaned money was paid monthly under the name of consulting fees.

If the money Professor Jeong handed to Jo is recognized as a loan rather than investment capital, Jo could be acquitted of a significant portion of the private equity fund-related charges.

However, the prosecution believes that even if it was a loan, if the interest on the money was paid using Korink PE's company funds, embezzlement charges would still apply.

Earlier, in February 2017, Professor Jeong and her sibling invested 1 billion KRW with Jo, and among that, 500 million KRW was used to acquire 250 new shares of Korink PE through a paid-in capital increase contract.

From Professor Jeong's perspective, she became a shareholder of Korink PE with 500 million KRW, but the prosecution argues that the company has no obligation to pay shareholders a certain percentage of the paid-in amount.

The prosecution also pointed out on this day, "Under current law, this is impossible, so isn't it that funds were illegally diverted and paid to the shareholder (Professor Jeong)?"

In response, Jo bowed his head and said, "I did not fully understand that this was a crime at the time," and apologized.

Jo was indicted on charges including embezzling 7.2 billion KRW of company funds while operating Korink PE, a private equity fund management company invested in by Professor Jeong, her two children, and the family of former Minister Cho Kuk.

He is also charged with falsely disclosing 5 billion KRW of stock shares acquired through private loans as equity capital and attempting to boost the stock price.

This content was produced with the assistance of AI translation services.