Prosecution Appeals 'Not Guilty' Verdict for Gu Bon-sang and Gu Bon-yeop on 130 Billion Won Tax Evasion Charges

Goo Bon-sang, Chairman of LIG Group [Photo by Yonhap News]

[Asia Economy Reporter Kim Daehyun] The prosecution has filed an appeal regarding the acquittal in the first trial of Koo Bon-sang, chairman of LIG Group, and Koo Bon-yeop, former vice president of LIG Construction, who were indicted on charges of tax evasion amounting to approximately 130 billion KRW.

According to the legal community on the 22nd, the prosecution submitted the appeal to the Seoul Central District Court Criminal Division 25-1 (Presiding Judges Kwon Seong-su, Park Jeong-je, Park Sa-rang) on the same day.

Previously, the court acquitted Chairman Koo and former Vice President Koo, who were charged with violating the Act on the Aggravated Punishment of Specific Crimes (tax evasion). Former and current executives of LIG Group and its affiliates, who were also indicted, were acquitted as well.

At that time, the court stated, "According to the registered letters and other documents, it cannot be concluded that the defendants were specifically informed about LIG's stock transactions and tax payments," and added, "Even considering the evidence submitted by the prosecution and the positions of Koo Bon-sang and Koo Bon-yeop within LIG Group comprehensively, it is difficult to recognize that they conspired in the backdating of documents by the finance management team official to manipulate the timing of the transfer or participated in such instructions."

Chairman Koo and others were indicted for falsely evaluating LIG's stock price at 3,846 KRW per share instead of the public offering price of its subsidiary defense company LIG Nex1 (10,481 KRW per share) in May 2015, and for manipulating financial transactions by remitting the sales proceeds 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. However, the prosecution judged that Chairman Koo and others manipulated the timing of shareholder registry and stock certificate name transfers to April, lowering the reported price to 3,876 KRW per share instead of the 12,036 KRW reflecting the LIG Nex1 public offering price.

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

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

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