[Exclusive] Increased Sentence for SeAH Besteel in Fair Trade Commission Investigation Obstruction Appeal... All Employees Guilty and Fines Raised

Company fined 30 million won → 100 million won
One employee's penalty changed from fine to imprisonment
Two employees initially acquitted in first trial now fined
Court: "Suspicion of systematic obstruction at company level"

On the 7th, SeAH Besteel Holdings, a steel company indicted for obstructing an investigation by destroying or hiding documents ahead of an on-site inspection by the Fair Trade Commission, received a heavier sentence in the appellate court than in the first trial.

[Asia Economy Reporter Oh Gyumin] SeAH Besteel Holdings, a steel company prosecuted for obstructing an investigation by destroying or hiding materials ahead of an on-site inspection by the Korea Fair Trade Commission (KFTC), received a heavier sentence in the appellate court than in the first trial.

The Seoul Western District Court Criminal Appeal Division 1-1 (Presiding Judge Kim Dokyun) overturned the original verdict on the 7th and sentenced SeAH Besteel Holdings to a fine of 100 million KRW for violating the Monopoly Regulation and Fair Trade Act. Mr. A, who was the head of the materials management team at SeAH Besteel’s Gunsan plant, was sentenced to six months in prison with a two-year probation, while employees B and C at the headquarters were fined 20 million KRW each. In the first trial in February, Mr. A and the company were fined 10 million KRW and 30 million KRW respectively, while B and C were acquitted.

In May 14, 2020, the KFTC conducted an investigation at SeAH Besteel’s business site regarding suspicions that 11 steelmakers colluded in purchasing steel scrap to engage in unfair joint activities. According to the court, Mr. A is accused of obstructing the investigation by shredding one 2019 work notebook and a diary he prepared while handling steel scrap purchasing duties on the same day using a document shredder. Employees B and C are accused of formatting the C drive of their work PCs or deleting conversations in group chat rooms the following day.

This case is the first in which the KFTC filed charges after the relevant law was amended to impose criminal penalties for obstructing KFTC investigations.

During the appellate trial, Mr. A and SeAH Besteel argued that “the destruction of the work notebook and diary did not result in or pose a risk of obstructing the investigation,” and that “the work notebook was created before the period under investigation by the KFTC, and the diary was used for personal purposes and thus unrelated to work.”

However, the court ruled that acts of hiding or destroying materials objectively presumed to be related to the investigation target constitute obstruction of the investigation itself. The court stated, “The work notebook and diary destroyed by Mr. A, and the work-related files formatted and deleted by Mr. B and Mr. C, are objectively presumed to be materials related to the KFTC’s investigation into steel scrap collusion.”

The court pointed out, “The defendants’ acts of obstructing the investigation are highly blameworthy, and there is suspicion that the company engaged in organized obstruction at the corporate level, while there is no evidence that the company exercised due care or supervision to prevent this. Nevertheless, the defendants deny the obstruction charges with illogical and unacceptable arguments.”

However, the court explained the sentencing rationale by stating, “There is insufficient evidence to conclude that SeAH Besteel’s collusion was concealed due to the defendants’ obstruction, and the scale of the obstruction does not appear to involve large-scale hiding or destruction of materials.”

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