Cho Hyun-joon, Suspended Prison Sentence in Second Trial... All Charges of Breach of Trust Acquitted

[Image source=Yonhap News]

[Asia Economy Reporter Hwang Yoon-joo] Cho Hyun-joon, chairman of the Hyosung Group, who was sentenced to prison in the first trial on charges of embezzlement and breach of trust, had some charges overturned as not guilty in the appellate court and was sentenced to a suspended prison term.

The Criminal Division 6 of the Seoul High Court (Presiding Judges Oh Seok-jun, Lee Jeong-hwan, and Jung Soo-jin) on the 25th overturned the original sentence of 2 years imprisonment for Cho, who was indicted without detention on charges including embezzlement and breach of trust under the Act on the Aggravated Punishment of Specific Economic Crimes, and sentenced him to 2 years imprisonment with a 3-year suspension.

The court acquitted the breach of trust charge related to artworks, which was recognized as guilty in the first trial, and only acknowledged the embezzlement charge of about 1.6 billion won among all charges as guilty.

At the same time, the court criticized, "The amount embezzled by the defendant is not small, and most of the embezzled amount appears to have been used for personal purposes, so the nature of the crime is not good."

However, the court explained the sentencing background, saying, "The defendant has fully reimbursed the damages, so the damage has been restored, and considering the size of the company, it is not easy to regard the amount embezzled over 11 years, 1.6 billion won, as a very large amount."

Cho was indicted in January 2018 on charges of causing a loss of 17.9 billion won by having his personal company, Galaxia Electronics, in which he is the major shareholder, conduct a paid-in capital reduction and repurchase of treasury stocks to raise funds for stock repurchase in July 2013.

Additionally, he was charged with gaining a profit of 1.2 billion won by having the Hyosung 'Art Fund' purchase 38 artworks, which he had bought with personal funds in 2008-2009, at an inflated price.

He was also accused of paying about 1.6 billion won in false salaries by disguising the hiring of an aide named Han and acquaintances between 2002 and 2012.

In the first trial, the breach of trust charge related to Galaxia Electronics, which involved the largest amount, was acquitted. The court ruled that breach of trust could not be recognized solely because new shares were allocated at a price higher than the market price during the paid-in capital reduction process.

The first trial also did not recognize the amount of 1.2 billion won for the artworks purchased by the Art Fund, citing difficulty in accurately calculating the amount. Instead of breach of trust under the Act on the Aggravated Punishment of Specific Economic Crimes, the court applied breach of trust in the course of business.

The appellate court acquitted the breach of trust charge related to the purchase of artworks. It found no objective data to evaluate the price of the artworks and thus could not conclude that they were purchased at a price higher than the market price, nor was there evidence that the Art Fund suffered a loss.

However, the appellate court upheld the guilty verdict on the charge of paying false salaries to aides and acquaintances, as in the first trial.

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