Lotte Chemical '20 Billion Won Tax Fraud Refund' Case, Not Guilty Confirmed

Former President Heo Su-young Found Guilty of 'Third-Party Bribery and Embezzlement'... 1 Year Prison Sentence with 2 Years Probation

[Asia Economy Reporter Bae Kyunghwan] The case involving former executives of Lotte Chemical accused of a 20 billion won 'tax refund lawsuit fraud' has been finally concluded with a not guilty verdict. However, former Lotte Chemical CEO Heo Su-young was found guilty of attempting to bribe tax authorities when a tax investigation began.

On the 29th, the Supreme Court's First Division (Presiding Justice Park Jeong-hwa) upheld the lower court's ruling of not guilty on tax fraud charges against former Lotte Materials President Ki Jun and former Lotte Materials Finance Director Kim, who was the finance team leader at the time, in the appeal trial for violations of the Act on the Aggravated Punishment of Specific Crimes (tax-related offenses).

Additionally, the court maintained the original sentence of one year imprisonment with two years probation for former Lotte Chemical CEO Heo, who was found guilty of bribing tax investigation officials and receiving travel expenses and other support from partner companies.

Heo and Ki, while working at KP Chemical (now Lotte Chemical), were accused of submitting false documents to claim corporate tax refunds from April 2006 to March 2007, resulting in a refund of 20.7 billion won. At that time, KP Chemical's books recorded approximately 151.2 billion won in tangible assets, including machinery and equipment, but the prosecution judged these records to be fabricated through accounting fraud.

Separately from the tax refund lawsuit, Heo was also indicted for evading 1.3 billion won in taxes by omitting individual consumption tax targets. Furthermore, he faced charges of third-party bribery for giving tens of millions of won to Kim, the head of tax firm T, a former National Tax Service official, to influence the tax investigation, and breach of trust for receiving tens of millions of won from partner companies in exchange for business favors.

The first trial acquitted Heo and others of the 'tax refund lawsuit fraud' charges, ruling that there was no proof of the crime. Testimonies claiming that the books were falsified were deemed unreliable, and regarding Heo's omission of individual consumption tax, the court ruled that under the Individual Consumption Tax Act, it was difficult to consider it a taxable subject, so tax evasion was not established.

However, the court found Heo guilty of some charges, stating, "While operating a large corporation, he neglected his social responsibilities by bribing tax officials and using his superior position to receive travel expenses and other support from partner companies."

The second trial upheld the first trial's judgment. The court stated, "There is no evidence to prove that the loss of tangible assets at Lotte Chemical was due to accounting fraud as the prosecution claims," and "the materials in question are not subject to individual consumption tax." However, it affirmed the original ruling recognizing Heo's guilt in third-party bribery and breach of trust.

The Supreme Court's ruling on the day was consistent. The court stated, "There is no error in the lower court's judgment that violates the rules of logic and experience, exceeds the limits of free evaluation of evidence, or misinterprets relevant laws."

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