Supreme Court Confirms Not Guilty Verdict for Chairman Heo Young-in of SPC in 'Low-Price Transfer of Affiliate Shares' Case

SPC Group Chairman Huh Young-in, who was indicted on charges of instructing the sale of affiliate stocks at a low price to evade gift tax, was acquitted by the Supreme Court on the 12th.

Huh Young-in, Chairman of SPC Group. Photo by Yonhap News

On this day, the Supreme Court's 2nd Division (Presiding Justice Park Young-jae) upheld the lower court's verdict of not guilty for Chairman Huh, who was indicted for violating the Act on the Aggravated Punishment of Specific Economic Crimes (breach of trust). Former SPC Group Chief Operating Officer Cho Sang-ho and SPC CEO Hwang Jae-bok, who were also tried together, were all acquitted as well.

Chairman Huh and others were indicted on charges of transferring Mildawon stocks held by affiliates Paris Croissant and Shani to Samlip at a low price in December 2012 to evade gift tax, thereby obtaining profits worth approximately 17.97 billion KRW. They instructed the sale of Mildawon stocks to Samlip at 255 KRW per share, which was significantly lower than the acquisition cost (3,038 KRW) and the previous year's valuation (1,180 KRW). The prosecution viewed that this low-price purchase caused losses of 12.16 billion KRW to Paris Croissant and 5.81 billion KRW to Shani.

However, the first trial court acquitted them, stating that based solely on the evidence submitted by the prosecution, it was difficult to conclude that Chairman Huh and others instructed the stock transaction with the intent to evade gift tax. The first trial court stated, "The intent for breach of trust charges presupposes awareness of the low price of the stocks, but based solely on the evidence submitted by the prosecution, it is fundamentally difficult to regard the defendants' actions in determining the transfer stock price as breach of trust." Although the prosecution appealed, the second trial court also dismissed the appeal, stating, "It is difficult to recognize any improper instructions or involvement by the defendants in determining the stock price evaluation method."

The Supreme Court's judgment was the same. The Supreme Court stated, "There is no error in the lower court's not guilty ruling regarding the establishment of the crime of violating the Act on the Aggravated Punishment of Specific Economic Crimes."

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