Seventy-year-old company head pockets 200 million won by falsely promising "primary vendor rights for Samsung phones in China"

[Financial News] A man in his 70s who swindled 200 million won by claiming he would obtain primary vendor rights (official supply status) for Samsung mobile phones in China has been sentenced to prison.
According to the legal community on the 22nd, the Single-Judge Criminal Division 8 of the Seoul Eastern District Court, presided over by Judge Lee Jun-seok, on January 30 sentenced a 70-year-old man surnamed Kim, head of A Corporation, to four years in prison on fraud charges.
Around October 2018, at the office of an acquaintance of the victim, a man surnamed Park, located in Songpa District in Seoul, Kim told Park, "I know people at a major conglomerate, Company S, and at Group Corporation B under China Post," and claimed, "I will obtain primary vendor rights in China for Samsung mobile phones from Company S, designate Group Corporation B as the purchasing company in China, and sell Samsung mobile phones there." He was indicted on charges of defrauding Park with these false statements.
Kim then asked Park, "I need funds for this project, so please lend me 200 million won," and promised that if he obtained the vendor rights and sales took place by December 30, 2018, he would pay Park 30% of the profits in addition to repaying the 200 million won loan. It was also found that he promised to return the principal by the same deadline even if he failed to secure the vendor rights, and to pay 24% annual interest from the following day in case of delay.
In November of the same year, Kim signed a loan agreement with Park. A special clause stated that "the loan will be used as expenses for securing Chinese vendor rights for Company S related to the China business and for concluding the contract, and if a formal contract is not concluded by December 30, 2018, the creditor may immediately demand repayment of the principal."
However, the court found that Kim (1) had no ability to obtain Chinese vendor rights for Samsung mobile phones from Company S by December 30, 2018, or to designate Group Corporation B as the purchasing company and proceed with sales; (2) had no intention of using the money received from the victim for securing vendor rights or contract expenses; and (3) already had personal debts exceeding about 300 million won at the time, leaving him without the intent or ability to repay the loan by the agreed deadline.
The court also noted that on September 10, 2018, prior to this incident, Kim had already signed a business rights acquisition and joint business agreement with C Corporation for obtaining primary Chinese vendor status for Samsung mobile phones from Company S, and had borrowed 100 million won from C Corporation as project expenses, yet he failed to disclose this fact to Park.
Explaining the sentence, the court stated, "The damage amount of 200 million won is quite substantial, and even more than seven years after the offense, there has been virtually no recovery of the loss, which makes his culpability grave." The court added, "Despite being given ample time to make restitution, he made no effort to do so, failed to appear for the sentencing hearing and absconded, and he also has prior convictions for similar fraud offenses. These factors were taken into account in determining the sentence."
yesji@fnnews.com Kim Ye-ji Reporter