Embezzlement and Breach of Trust by Former STX Chairman Kang Deok-su... Supreme Court Confirms Suspended Sentence

[Asia Economy Reporter Baek Kyunghwan] Former STX Group Chairman Kang Deok-su, who was prosecuted for charges including accounting fraud and embezzlement/breach of trust, has had his suspended prison sentence confirmed by the Supreme Court.

On the 8th, the Supreme Court's 2nd Division (Presiding Justice Kim Sang-hwan) announced that it upheld the lower court's ruling sentencing former Chairman Kang to 3 years in prison with a 4-year suspended sentence in the appeal trial on charges including violation of the Act on the Aggravated Punishment of Specific Economic Crimes (embezzlement).

Former Chairman Kang was arrested and prosecuted on charges of inflating operating profits of STX Shipbuilding & Marine Engineering by approximately 2.3 trillion won through accounting fraud from 2008 to 2012, as well as fraudulently obtaining loans using false financial statements and embezzling 55.7 billion won of company funds.

The first trial recognized some charges as guilty, determining the damage amount from embezzlement and breach of trust under the Act on the Aggravated Punishment of Specific Economic Crimes to be 67.9 billion won and the scale of accounting fraud to be 584.1 billion won, sentencing him to 6 years in prison.

The second trial additionally recognized breach of trust charges related to improper support of advance payments worth approximately 23.1 billion won by STX Construction, considering a total amount of about 91 billion won as guilty.

However, the charges of accounting fraud and fraud related to STX Shipbuilding & Marine Engineering were overturned. This was because it was not proven that former Chairman Kang had directed these acts or received specific reports from the staff. Kang, who was on trial while detained, was released after his prison sentence was reduced to a suspended sentence in the second trial.

Both former Chairman Kang's side and the prosecution appealed, but the Supreme Court dismissed all appeals. The Supreme Court stated, "There is no error in the lower court's judgment regarding the intent to unlawfully gain in the crime of embezzlement, the establishment of breach of trust, intent of breach of trust, the business judgment rule, conspiracy, accounting fraud, and the legal principles concerning the benefit of appeal." Former Minister of Industry and Resources Lee Hee-beom, who was jointly prosecuted with former Chairman Kang on breach of trust charges related to providing joint guarantees for STX Heavy Industries, was also acquitted with the verdict finalized.

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