'Use of Non-Public Information' Lee Dong-chae, Former Chairman of Ecopro, Sentenced to Prison

Lee Dong-chae, former chairman of EcoPro Group (64), who was indicted for obtaining unfair profits of 1.1 billion KRW using undisclosed information, has had his prison sentence finalized by the Supreme Court.

Former EcoPro Chairman Dong-chae Lee is speaking at the groundbreaking ceremony of the 'EcoPro Global Hungary Plant' held in Debrecen, Hungary, on April 21. [Image source=Yonhap News]

On the 18th, the Supreme Court's First Division (Presiding Justice Oh Kyung-mi) upheld the original sentence of 2 years imprisonment, a fine of 2.2 billion KRW, and a confiscation of approximately 1.1 billion KRW against former Chairman Lee, who was charged with violations of the Capital Markets Act and the Act on the Aggravated Punishment of Specific Crimes related to the Proceeds of Crime. The court stated, "There is no error in the original judgment regarding violations of the rules of logic and experience or misinterpretation of relevant laws."

Previously, Lee was brought to trial in May last year on charges of purchasing shares before the mid-to-long-term supply contract information of EcoPro BM was disclosed on the Financial Supervisory Service's electronic disclosure system from January 2020 to September 2021, and then reselling them to gain a market price difference of about 1.1 billion KRW. He obtained undisclosed information in advance at management evaluation meetings attended by executives and employees of affiliated companies and used his own nominee securities accounts and his children's securities accounts to carry out the crime. From the beginning of the prosecution's investigation, Lee submitted a confession and admitted to the crime, and as a sign of remorse, he returned the unfair profits to EcoPro BM.

The first trial sentenced him to 3 years imprisonment with 5 years probation and a fine of 3.5 billion KRW. At that time, the court said, "The undisclosed important information used in the crime was clearly favorable information given the contract scale. In fact, the stock price surged sharply after the contract details were disclosed," adding, "As the head of a corporate group, he neglected his social responsibility to lead transparent profit realization. The crime is aggravated by disguising criminal proceeds through the use of nominee accounts and providing funds to his children for stock trading."

The second trial sentenced him to 2 years imprisonment and a fine of 2.2 billion KRW. It also stated, "Since a prison sentence was imposed, and there is a high risk of flight, he is detained in court," and detained former Chairman Lee in court. The second trial court said, "The first trial considered the act of returning the unfair profits as a favorable sentencing factor, but the nature of the crime involving the use of undisclosed important information makes actual recovery of damages practically impossible," and "Therefore, this is not considered an independent favorable sentencing factor." Furthermore, it stated, "The guilt is not light as the crime was committed for personal gain without considering innocent investors, and as the ultimate person responsible, his responsibility is heavier than that of other defendants," adding, "If he had thoroughly directed and supervised in advance, the crimes of other executives and employees could have been prevented."

The Supreme Court also agreed with the second trial's judgment. Meanwhile, five current and former executives and employees of EcoPro and its affiliate EcoPro BM, who were indicted together, also had their suspended prison sentences and fines finalized.

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