ID :
23762
Fri, 10/10/2008 - 20:05
Auther :
Shortlink :
http://m.oananews.org//node/23762
The shortlink copeid
Appeals court spares jail term for Samsung Group ex-chairman on tax evasion
(ATTN: UPDATES lead, Lee's quote, civic criticism)
By Kim Hyun
SEOUL, Oct. 10 (Yonhap) -- An appeals court found former Samsung Group chairman
Lee Kun-hee guilty of tax evasion but dismissed the more serious breach of trust
charge linked to his wealth transfer, affirming a lower court's verdict that
spared him a prison sentence.
"The case of issuing stocks at a lower price to avoid inheritance and other taxes
cannot be seen as causing losses to the company," Judge Seo Ki-seog of the Seoul
High Court said.
The judge convicted Lee of tax evasion for hidden assets, calling the behavior
"very unjust."
The appeals court largely affirmed the lower court's verdict, sentencing Lee to
three years in prison, suspended for five years, with a 110 billion won (US$79
million) fine.
Sanctioned by the National Assembly, an independent probe led Lee to resign and
prompted a drastic overhaul in Korea's largest conglomerate.
Lee, who in a previous trial appealed for leniency, walked out of the packed
courtroom only saying, "I don't know much about law." He evaded all other
questions by reporters.
A special prosecutor involved in the case demanded a seven year jail sentence for
Lee and a 350-billion-won fine.
In the independent probe, special prosecutor Cho Joon-woong charged Lee with
evading 112.8 billion won in taxes by hiding assets under borrowed-name stock
accounts between 2000 and 2006 and orchestrating the murky wealth transfer to his
son and heir-apparent, Jae-yong, in the mid-1990s.
In the father-to-son transfer, Jae-yong acquired convertible bonds from Samsung's
de-facto holding company, Everland theme park, and shares of other Samsung
affiliates at "remarkably low" prices, the prosecutor said.
The bargain takeover helped the younger Lee acquire group control without paying
taxes and caused tremendous losses to shareholders, he said.
The lower court, however, ruled that Everland shareholders' losses do not
constitute breach of trust by Lee.
The appeals court upheld the ruling, saying Jae-yong's purchase of the low-priced
convertible bonds "may have caused losses to shareholders but not to the
company," and thus do not constitute a breach of trust charge.
The civic community called the verdict "dumb-founding." Samsung's wealth transfer
was brought into the public spotlight by leading civic organizations like the
People's Solidarity for Democracy.
"I have never felt so ashamed to have studied law," said Kim Sang-jo, a trade
professor of Hansung University and outspoken critic of Samsung.
To shed its tarnished image, Samsung has dismantled its strategic planning
office, a key decision-making body, and relegated the former chairman's authority
to executives as part of efforts to increase transparency in the company, which
generates a fifth of the country's exports.
By Kim Hyun
SEOUL, Oct. 10 (Yonhap) -- An appeals court found former Samsung Group chairman
Lee Kun-hee guilty of tax evasion but dismissed the more serious breach of trust
charge linked to his wealth transfer, affirming a lower court's verdict that
spared him a prison sentence.
"The case of issuing stocks at a lower price to avoid inheritance and other taxes
cannot be seen as causing losses to the company," Judge Seo Ki-seog of the Seoul
High Court said.
The judge convicted Lee of tax evasion for hidden assets, calling the behavior
"very unjust."
The appeals court largely affirmed the lower court's verdict, sentencing Lee to
three years in prison, suspended for five years, with a 110 billion won (US$79
million) fine.
Sanctioned by the National Assembly, an independent probe led Lee to resign and
prompted a drastic overhaul in Korea's largest conglomerate.
Lee, who in a previous trial appealed for leniency, walked out of the packed
courtroom only saying, "I don't know much about law." He evaded all other
questions by reporters.
A special prosecutor involved in the case demanded a seven year jail sentence for
Lee and a 350-billion-won fine.
In the independent probe, special prosecutor Cho Joon-woong charged Lee with
evading 112.8 billion won in taxes by hiding assets under borrowed-name stock
accounts between 2000 and 2006 and orchestrating the murky wealth transfer to his
son and heir-apparent, Jae-yong, in the mid-1990s.
In the father-to-son transfer, Jae-yong acquired convertible bonds from Samsung's
de-facto holding company, Everland theme park, and shares of other Samsung
affiliates at "remarkably low" prices, the prosecutor said.
The bargain takeover helped the younger Lee acquire group control without paying
taxes and caused tremendous losses to shareholders, he said.
The lower court, however, ruled that Everland shareholders' losses do not
constitute breach of trust by Lee.
The appeals court upheld the ruling, saying Jae-yong's purchase of the low-priced
convertible bonds "may have caused losses to shareholders but not to the
company," and thus do not constitute a breach of trust charge.
The civic community called the verdict "dumb-founding." Samsung's wealth transfer
was brought into the public spotlight by leading civic organizations like the
People's Solidarity for Democracy.
"I have never felt so ashamed to have studied law," said Kim Sang-jo, a trade
professor of Hansung University and outspoken critic of Samsung.
To shed its tarnished image, Samsung has dismantled its strategic planning
office, a key decision-making body, and relegated the former chairman's authority
to executives as part of efforts to increase transparency in the company, which
generates a fifth of the country's exports.
