Chairman Lee Jung-geun Sentenced to 2 Years and 6 Months in Prison for 'Embezzlement and Breach of Trust' (Comprehensive)

Supreme Court Confirms Lower Court Ruling... No Decision Made on Reconsideration of Suspension of Detention Execution

[Image source=Yonhap News]

[Asia Economy Reporter Bae Kyunghwan] Lee Joong-geun, chairman of Booyoung Group, who was tried on charges including embezzlement worth billions of won, has been sentenced to 2 years and 6 months in prison.

The Supreme Court's 2nd Division (Presiding Justice Kim Sang-hwan) confirmed on the morning of the 27th the original sentence of 2 years and 6 months imprisonment for Lee, who was tried on charges including violation of the Act on the Aggravated Punishment of Specific Economic Crimes (embezzlement).

Previously, the first trial court recognized only KRW 36.57 billion embezzlement and KRW 15.6 billion breach of trust as guilty out of the billions of won embezzlement and breach of trust charges, sentencing 2 years imprisonment for breach of trust and 3 years imprisonment plus a fine of KRW 10 million for the remaining charges. Considering Lee’s age and health condition, the court also accepted his bail application.

In the second trial, some parts were overturned. The breach of trust charge, which was found guilty in the first trial, was acquitted, and only the remaining guilty charges were sentenced to 2 years and 6 months imprisonment and a fine of KRW 10 million. Bail was revoked and Lee was detained in court.

Both Lee and the prosecution appealed, but the Supreme Court confirmed the original ruling recognizing guilt or innocence on charges of embezzlement or breach of trust, obstruction of official duties by deception, and bid rigging.

The key issues in the lawsuit were ▲whether the agreement to transfer shares before stock issuance constituted breach of trust ▲limits on disposition of retained earnings and shareholders’ meeting resolutions in a stock company ▲criteria for recognizing intent of breach of trust and the business judgment rule, and intent of breach of trust in inter-affiliate financial support within a corporate group ▲whether obstruction of official duties by deception applies to the Art Review Committee under the Act on Promotion of Culture and Arts ▲whether a rental business operator who converted rental housing to sale according to approved terms after the introduction of the sale conversion approval system can be punished for not converting at the sale conversion price under the old Rental Housing Act Enforcement Decree ▲and whether intent to unlawfully gain in embezzlement is recognized.

On this day, the court accepted the original ruling that acquitted Lee regarding the double transfer of shares, recognizing that notification with a fixed date had already been made, unlike the first trial. It also followed the original ruling acquitting Lee of violating the Rental Housing Act, citing insufficient evidence that the actual construction cost was lower than the standard construction cost used as the basis for calculating the sale conversion price when converting rental housing to sale.

However, the court did not make a decision on Lee’s re-appeal for suspension of detention execution. At the time of the second trial when court detention was decided, Lee’s side argued, "The bail revocation decision cannot be executed during the period for filing an immediate appeal, but the prosecutors did not notify that they could file an immediate appeal against the bail revocation decision and directed detention execution during the suspension period." They filed a quasi-appeal against the detention execution order, but the Seoul High Court dismissed it, and Lee’s side re-appealed to the Supreme Court.

Meanwhile, Lee had also submitted a request for suspension of detention execution and bail to the Supreme Court in March. The Supreme Court accepted the suspension of detention execution due to health reasons, and Lee’s detention was suspended for about 20 days in June.

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