CEO of Yuhwa Securities Indicted for Colluding to Buy Back Treasury Shares to Evade Inheritance Tax

[Image source=Yonhap News]

[Asia Economy Reporter Hwang Seoyul] Yoon Kyung-rip, CEO of Yuhwa Securities, has been indicted on charges of engaging in wash trading to reduce inheritance tax burdens. Wash trading refers to transactions where the seller and buyer prearrange the timing, quantity, and price of stock trades and execute the trades accordingly.

On the 26th, the Financial Investigation Division 1 of the Seoul Southern District Prosecutors' Office (Chief Prosecutor Lee Seunghyung) announced that they had indicted Yoon Kyung-rip, the largest shareholder of Yuhwa Securities, without detention on charges of violating the Capital Markets Act.

The Seoul Southern District Prosecutors' Office stated, "This case involves a defendant who, as the largest shareholder and CEO of a securities firm, has a responsibility to maintain trust and fairness in the capital market more than anyone else, but abused that position to commit the crime," adding, "We will continue to cooperate with financial authorities and respond strictly to illegal activities by financial institution executives and employees."

CEO Yoon is accused of acquiring treasury shares instead of inheritance to reduce the heavy tax burden and strengthen control over the securities company shares owned by his father, the late founder and honorary chairman Yoon Jang-seop. To do this, he allegedly made false disclosures suggesting that treasury shares would be publicly purchased on the securities market, then had employees acquire about 800,000 shares (worth approximately 12 billion KRW) owned by his father through wash trading.

Following a complaint by the Financial Services Commission's Securities and Futures Commission in June, the Seoul Southern District Prosecutors' Office directed the Financial Supervisory Service's Capital Market Special Judicial Police to investigate. On October 31, the prosecution requested an arrest warrant for CEO Yoon, but the court dismissed it, citing the need to guarantee the right to defense despite acknowledging the facts.

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