'LIG Group's Koo Bon-sang and Koo Bon-yeop Acquitted in First Trial on 130 Billion Won Tax Evasion Charges'

Chairman Koo Bon-sang of LIG Group, indicted on charges of evading taxes amounting to 130 billion won through low-price stock trading
[Photo by Yonhap News]

[Asia Economy Reporter Kim Daehyun] Gu Bonsang, chairman of LIG Group, and Gu Bonyeop, former vice president of LIG Construction, who were prosecuted on charges of tax evasion amounting to about 130 billion won, were acquitted in the first trial.

On the afternoon of the 14th, the Criminal Division 25-1 of the Seoul Central District Court (Presiding Judges Kwon Seongsu, Park Jeongje, Park Sarang) delivered this verdict to Chairman Gu and former Vice President Gu, who were indicted for violating the Act on the Aggravated Punishment of Specific Crimes (tax evasion). Current and former executives of LIG Group and its affiliates, who were also indicted, were acquitted as well.

The court stated, "According to registered letters and other documents, it cannot be considered that the defendants were informed of specific details such as LIG stock transactions and tax payments," and added, "even when comprehensively considering the evidence submitted by the prosecution and the positions of Gu Bonsang and Gu Bonyeop within LIG Group, it is difficult to recognize that they conspired to backdate documents for manipulating the timing of transfer by the finance management team or participated in such instructions."

Previously, Chairman Gu and others were prosecuted for falsely evaluating LIG's stock price at 3,846 won per share instead of the public offering price of its subsidiary, defense company LIG Nex1 (10,481 won per share), in May 2015, and for manipulating financial transactions by transferring payment for stock sales to employees at the falsely evaluated price a month later.

Since LIG Nex1's securities registration was executed in August 2015, the June LIG stock transactions should have applied the LIG Nex1 public offering price, but the prosecution judged that Chairman Gu and others manipulated the timing of shareholder registry and stock certificate name transfers to April, lowering the reported price to 3,876 won per share instead of 12,036 won per share reflecting the LIG Nex1 public offering price.

The prosecution viewed that Chairman Gu and others evaded a total of about 132.9 billion won in taxes, including gift tax of approximately 91.9 billion won, capital gains tax of about 39.9 billion won, and securities transaction tax of about 1 billion won.

Meanwhile, Chairman Gu and former Vice President Gu were indicted in November 2012 for issuing fraudulent corporate promissory notes (CP) worth about 200 billion won, and in 2017, the Supreme Court confirmed sentences of four years and three years imprisonment, respectively.

Immediately after the verdict, LIG stated, "We appreciate the court's wise judgment," and added, "We will contribute to national interests through responsible management in the future."

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