Hyosung Vice Chairman Lee Sang-woon's Suspended Prison Sentence Confirmed for '120 Billion Won Tax Evasion'

[Financial News] A suspended prison sentence has been finalized for Hyosung Group Vice Chairman Lee Sang-woon, who was brought to trial on charges of evading corporate taxes worth over 120 billion won. The trial, which began in 2014, concluded after 12 years following two rulings by the Supreme Court of Korea.
On the 10th, the Second Division of the Supreme Court of Korea (presiding Justice Eom Sang-pil) dismissed both the prosecution's and the defendant's appeals regarding Vice Chairman Lee, who was indicted on charges including violation of the Act on the Aggravated Punishment of Specific Crimes (taxation).
Accordingly, the remand trial ruling sentencing Vice Chairman Lee to 2 years and 6 months in prison, suspended for 4 years, and suspending the imposition of a fine has been finalized.
Vice Chairman Lee was indicted on charges of conspiring with executives, including the late Hyosung Group Honorary Chairman Cho Suk-rae, to inflate assets beyond their actual value between 2003 and 2012 by replacing bad assets, such as bad accounts receivable, with fictitious machinery that did not exist.
Subsequently, the company was also accused of evading corporate taxes by reflecting depreciation expenses on overstated assets or treating fictitious cost of goods sold as deductible expenses. The prosecution estimated the amount of corporate tax evaded at 123.7 billion won and also charged the illegal distribution of 50 billion won.
The first trial sentenced Vice Chairman Lee to two years and six months in prison, suspended for four years, and deferred the imposition of a fine. It found him not guilty of some charges. The appellate court also handed down the same sentence.
However, in the first appeal, the Supreme Court of Korea ruled that Honorary Chairman Cho and Vice Chairman Lee were not guilty of some of the corporate tax evasion charges and remanded the case to the Seoul High Court. While the remand trial overturned some of the guilty verdicts, it maintained the same sentence for Vice Chairman Lee as before.
As a result, the prosecution and Vice Chairman Lee's side appealed again, bringing the case to a second Supreme Court ruling.
In the retrial, issues were raised regarding whether concluding the trial without hearing the prosecution's additional opinion on the calculation of the tax evasion amount reflecting the minimum tax constituted insufficient deliberation, and whether there was an agreement for debt forgiveness with a foreign bank.
The Supreme Court of Korea found no error in the relevant lower court's judgment and dismissed the appeals from both sides.
Meanwhile, regarding Honorary Chairman Cho, who died during the trial, the ruling to dismiss the indictment was finalized in the remand trial.
[email protected] Choi Eun-sol Reporter