Former Daewoo Construction CEO acquitted of charges related to illegal slush fund creation worth 25 billion won

First Trial Convicts with Prison Sentence → Second Trial "Insufficient Evidence" Acquits

[Asia Economy Reporter Heo Kyung-jun] Former Daewoo Construction executives and the corporation, who were prosecuted for creating illegal slush funds worth around 25 billion KRW, have been acquitted.

The Supreme Court's First Division (Presiding Justice Oh Kyung-mi) announced on the 21st that it upheld the lower court's ruling acquitting three individuals, including former Daewoo Construction CEO A, who were charged with tax evasion under the Act on the Aggravated Punishment of Specific Crimes. The Daewoo Construction corporation, also indicted for violating the Tax Offenses Punishment Act, was likewise acquitted.

Mr. A was prosecuted on charges of creating slush funds totaling approximately 25.58 billion KRW by inflating payments during construction projects from December 2007 to December 2009 and then reclaiming the excess amounts. He was also charged with evading corporate tax of about 8.75 billion KRW by underreporting taxable amounts through falsified contracts that inflated construction costs.

In the first trial, Mr. A was sentenced to three years in prison and fined 3.5 billion KRW; the former Daewoo Construction division head received two years and six months imprisonment with a three-year probation and a 2 billion KRW fine; the former vice president was sentenced to three years imprisonment with a four-year probation and fined 2.6 billion KRW; and the Daewoo Construction corporation was fined 4 billion KRW.

However, the second trial court ruled differently. It stated, "Considering the purpose of creating the slush funds, the handling details, and the usage, the prosecution has not sufficiently proven that the defendants embezzled the funds personally or used them for personal purposes without the company's knowledge."

It also ruled, "For tax evasion to be established, the legitimate deductible expenses for each tax year must be clearly specified so that the evaded tax amount can be calculated, but this cannot be clearly determined."

The Supreme Court also agreed with the second trial court's judgment.

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