Ssangbangwool Kim Sung-tae Loses 2nd Trial in 3 Billion KRW Capital Gains Tax Cancellation Lawsuit

Seoul Central District Court. / Photo by Mun Ho-nam munonam@

[Asia Economy Reporter Kim Daehyun] Former Ssangbangwool Group Chairman Kim Sung-tae, who fled overseas, filed an administrative lawsuit requesting the cancellation of 3 billion KRW in capital gains tax, but lost in the appellate court.

On the afternoon of the 23rd, the Seoul High Court Administrative Division 11 (Presiding Judges Bae Junhyun, Lee Eunhye, Bae Jeonghyun) ruled against the plaintiff in the appeal trial of the capital gains tax imposition cancellation lawsuit filed by former Chairman Kim against the tax authorities.

Previously, Company A, the second-largest shareholder of Ssangbangwool Group, transferred 2,349,939 shares of Ssangbangwool stock to six people, including the spouse of former Chairman Kim, for a total of 9 billion KRW in 2010. They then sold the shares to a third party in the same year and earned capital gains.

The National Tax Service conducted a tax investigation on Ssangbangwool in 2014 and determined that the shares owned by three of these six individuals were actually owned by former Chairman Kim. Kim was imposed gift taxes and other taxes and paid them all at that time.

Subsequently, former Chairman Kim and Ssangbangwool officials were prosecuted for allegedly manipulating Ssangbangwool's stock price artificially from 2010 to 2011 (violation of the Capital Markets Act) and were sentenced to suspended prison terms in 2017.

During this process, circumstances suggesting that the shares owned by the remaining three individuals were also actually owned by former Chairman Kim surfaced, and in 2018, the National Tax Service revoked the previous tax imposition ex officio and re-imposed about 3.05 billion KRW, including 2.6 billion KRW in additional taxes, on former Chairman Kim.

Former Chairman Kim filed an objection lawsuit arguing that the shares were not held under a borrowed name.

The first trial ruled that only 1.1 billion KRW out of the 3 billion KRW capital gains tax needed to be paid. It found part of the tax imposition to be unjust.

The first trial court judged that only the portion owned by one of the three individuals in question was actually owned by former Chairman Kim and ordered the cancellation of taxation on the shares owned by the other two individuals.

However, the second trial ruled that the entire 3 billion KRW must be paid.

Meanwhile, former Chairman Kim left for Singapore at the end of May after the prosecution's investigation into Ssangbangwool Group began. The prosecution requested Interpol to issue a red notice.

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