[1] In a case where a company manager issues new stocks, etc. at a low price by the method of allocating shareholders or allocating them to a third party for the purpose of transferring control by avoiding tax (negative), whether the crime of occupational breach of trust is established (negative)

[2] In a case where the president of a large enterprise and the representative director of an unlisted company affiliated with a group issued convertible bonds and bonds with warrants at a low price without due process and allocated them to the president’s children, thereby securing control over the company and acquiring pecuniary profits while avoiding taxes, the case holding that the crime of violating the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Misappropriation) is not established on the ground that it cannot be deemed that the company

[3] The case holding that in a case where a personal property management agent of the president of a large enterprise acquired and sold shares owned by the president in the borrowed-name securities consignment account and did not report the transfer income tax before the provision on taxation of the transfer income tax of listed shares was newly established, it is merely a mere non-report and does not constitute tax evasion by fraud or other unlawful means

[1] In a case where new shares, etc. are issued at a low price for the purpose of transferring control rights, not for the purpose of raising funds, but for the purpose of evading gift tax, the company’s manager cannot be deemed to have a duty of allowing funds equivalent thereto to be introduced into the company by means of an increase in the amount of shares, such as the quantity of shares issued at a reasonable price. Therefore, in a case where the issue price, etc. is determined at a price lower than the reasonable price, the company’s manager would have been more than the funds that would have been introduced at a low price if the company had issued such a quantity of shares at a reasonable price, and thus, it cannot be deemed that there was a loss equivalent to the difference between the company and the existing company. However, in a case of the issuance of new shares by a method of allocating shareholders, the company cannot be deemed to have suffered losses for the reason that the shareholders would suffer from the decline in the value of existing shares due to the increase in the value of new shares, and thus, the company cannot be held liable for damages to the existing company due to the lack of understanding between the shareholders and the existing share value of the company.

[2] In a case where the president of a large enterprise and the representative director of an unlisted company affiliated with a group issued convertible bonds and bonds with warrant at a low price without due process and allocated them to the president’s children, thereby securing corporate governance and acquiring pecuniary profits, the case holding that the crime of violating the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Misappropriation) is not established, on the grounds that it cannot be deemed that the company suffered losses because it did not raise funds, but did not mean that it did not cause losses to the company, as it did

[3] In a case where a personal property management agent of the president of a large enterprise acquired and sold shares owned by the president in the borrowed-name securities consignment account and did not report the transfer income tax before the provision on taxation of the listed shares was newly established, the case holding that it is merely a mere non-report and does not constitute tax evasion by fraud or other unlawful means

[1] Article 356 of the Criminal Code, Article 424-2 of the Commercial Code / [2] Article 3 (1) of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes / [3] Article 9 (1) of the Punishment of Tax Evaders Act, Article 94 subparagraph 3 of the Income Tax Act (amended by Act No. 5994 of Aug. 31, 1999), Article 157 of the Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 16762 of Mar. 28, 200)

No. 7 others

Defendants and Special Prosecutor

Mabroes

Maho-man et al.

Attorney Cho Jae-spa et al.

Seoul Central District Court Decision 2008Gohap366 Decided July 16, 2008

1. Of the judgment of the court below, the part of the judgment of the court below as to the acquittal (including the acquittal part in the reason) of the violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Misappropriation) regarding Samsung SDR Co., Ltd. related to the bonds with warrants and the guilty part (including the acquittal part in the reason) against Defendant 3, 4, and 8 shall be reversed.

2. Defendant 3 shall be punished by imprisonment with prison labor for a violation of the Act on the Aggravated Punishment, etc. of Specific Crimes (tax) committed on May 31, 2003 and May 31, 2004 at the time of the original adjudication; imprisonment for a violation of the Act on the Aggravated Punishment, etc. of Specific Crimes committed on May 31, 2005 at the time of the original adjudication; imprisonment for a violation of the Act on the Aggravated Punishment, etc. of Specific Crimes committed on May 31, 2005 at the time of the original adjudication; imprisonment for a violation of the Act on May 31, 2006 at the time of the original adjudication; imprisonment for a violation of the Act on the Aggravated Punishment, etc. of Specific Crimes committed on May 31, 2007

3. The execution of each of the above imprisonment with prison labor shall be suspended for five years for defendants 3 and 4, and for four years for defendants 8, respectively.

4. The respective fines imposed on Defendant 3, 4, and 8 shall be exempted respectively.

5. Ordering Defendant 3 and Defendant 4 to provide each 320 hours of time, and each 240 hours of natural and environmental protection activities to Defendant 8 to provide community service for welfare facilities and group service activities.

6. Of the facts charged against Defendant Lee Jin-hee, Defendant 3, and Defendant 4, the charge of violating the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Misappropriation) related to Samsung SDR and Bonds with Warrants is not guilty.

7. The defendants 6 and 7 are not guilty.

8. The appeal by the defendant Lee I-hee and the judgment of the court below as to the acquittal of the defendant Lee Jong-hee and the defendant Lee 2, 3, 4, and 5 as to the violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Misappropriation of trust), the guilty part against the defendant Lee Byung-hee, the guilty part against the defendant Lee Byung-hee, and the special prosecutor's appeal as to the acquittal of the violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (tax) in relation to the convertible bonds

I. Summary of the grounds for appeal

1. Reasons for appeal concerning the violation of the Act on the Aggravated Punishment, etc. of Specific Crimes by the defendant's this case, defendant 3, 4 and 8;

A. misunderstanding of facts and misapprehension of legal principles

Of the facts charged, the court below found the above defendants guilty on the part of evading capital gains tax on the transfer of shares acquired after January 1, 1999, on the ground that the act of acquiring and transferring shares through a borrowed account constitutes "Fraud or other unlawful act" as stipulated in Article 9 (1) of the Punishment of Tax Evaders Act, and that the above defendants had the intent to evade capital gains tax, but the borrowed account of this case has been managed under the same purpose and intent as the protection of management right from the past. In light of the following, the act of acquiring and transferring shares through the borrowed account cannot be deemed as "Fraud or other unlawful act" as stipulated in Article 9 (1) of the Punishment of Tax Evaders Act. The above defendants did not have the intention to evade capital gains tax, and in particular, it is unclear whether capital gains tax liability should be established under the Act and subordinate statutes that had been enforced at the time of the transfer of shares after the transfer of shares, and thus, it did not have any error in the misapprehension of legal principles as to the crime of tax evasion, thereby affecting the conclusion of the judgment.

B. Unreasonable sentencing

Taking into account all the sentencing conditions against the above defendants, the sentence of the court below [this case: the sentence of imprisonment for a term of five years, a fine of 10,00,000,000 won, defendant 3: the sentence of imprisonment for a term of five years, a fine of 110,000,000 won, and a violation of the Act on the Aggravated Punishment, etc. of Specific Crimes (tax) for a term of May 31, 2003 at the time of the original adjudication and May 31, 204, a fine of 14,00,000,000 won, the original adjudication of May 31, 2005 at the time of the original adjudication, May 31, 2006, May 31, 2007, the suspended sentence of imprisonment for a term of six years, a fine of 60 years, a fine of 0 years, a fine of 0 years, a fine of 0 years, 30 years or more, and a suspended execution (tax).

2. Grounds for appeal by the special prosecutor;

A. The violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Misappropriation of Trust) in relation to the issuance of Bertland convertible bonds by Defendant Lee Jin-hee, Defendant 2, 3, 4, and 5 and the violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Misappropriation of Trust) in relation to the issuance of Bertland convertible bonds and the violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Misappropriation

The court below determined that, where a stock company issues convertible bonds or warrant bonds at a price lower than the reasonable price in order to determine the conversion price or the exercise price of the preemptive right to new stocks, this is a capital transaction and the increase in the company's capital itself as well as the increase of the company's capital, and there is no asset leaked out of the company, so the company's losses do not exist to the company manager, and therefore, there is no duty to make the company manager (director) to bring the maximum funds into the company in connection with the issuance of convertible bonds, etc., but there is no loss caused to the company due to the weakening of dominance and the decline in stock value. Thus, if convertible bonds, etc. are issued by the method of the shareholder allocation, there is no room to discuss the loss of the existing shareholders or the company's losses because the existing shareholders permit the existing shareholders to own losses and the company's losses. However, if the company is issued by the third party allocation method, the interest of the existing shareholders is infringed, that is, the existing shareholders' losses can be viewed as the company's losses.

However, this is a narrow sense of capital transaction, which is separate from capital transaction and profit and loss transaction, is entirely different from the concept of profit and loss under the Criminal Act. Generally, shareholders' profit is directly connected with the company's profit and shareholders' profit is connected to the company's profit, and shareholders' profit comes to the company's profit, so it does not comply with the legal principles of the company law. It goes against the express provisions of Article 424-2 of the Commercial Act. The issuance of convertible bonds is against the company's act and the company's profit is not a legal act, and the company's profit is naturally attributed to the company. The company's loss is an indirect or different aspect, and the company's loss can be acquired in return for the same kind of capital formation. In full view of the above facts, the court below erred by misapprehending the legal principles of the company's profit and loss due to the issuance of convertible bonds.

B. The violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Misappropriation of Trust) regarding the issuance of the Ibland convertible bonds by Defendant Lee Ho-hee, Defendant 2, 3, 4, and 5

(1) mistake of facts and misapprehension of legal principles concerning allocation methods

The court below held that ① even if the resolution of the board of directors on the issuance of convertible bonds is null and void, there is no defect in granting the preemptive rights to the shareholders; ② The failure to guarantee the subscription maturity cannot be deemed as a third party’s allocation, and ③ there is no sufficient evidence to exclude reasonable doubt as to the fact that there was no preemptive notice of shareholders and the forfeited rights; ④ even if the forfeited rights of shareholders were planned in advance, the shareholders should be deemed to have forfeited their rights if there were no tort such as deception and intimidation against the shareholders. However, in light of the resolution of the board of directors on October 30, 1996, the portion of “the issuance of convertible bonds” and “the third party allotment at the time of the allotment of the forfeited bonds” should be deemed to have been issued without any legitimate opportunity for the issuance of the new convertible bonds to the shareholders, and thus, it should be deemed that there was no evidence to acknowledge the legal effect of the issuance and allotment on the basis of the existing 3rd party’s prior to the issuance of the convertible bonds.

(2) Omission of hearing, mistake of facts, misapprehension of legal principles, and lack of reasons

Of the facts charged in the instant case, since the board of directors of Ireland had the purpose of issuing convertible bonds under the direction of the office of the office of the secretary in order to transfer control over the transfer of re-use, etc., the fact that the director of Ireland issued convertible bonds under the name of the third party to raise funds for facilities without any urgent managerial necessity is an act violating the director's duty of preference and that the transfer of control over the company is an act violating the director's duty of preference and the provisions of Article 513 (3) of the Commercial Act that requires a special resolution of the general meeting of shareholders to issue convertible bonds in the manner of third party allocation, unless otherwise stipulated in the articles of incorporation, shall be applied to the case where the forfeited bonds are issued in the first third party allocation method, as well as to the case where the forfeited bonds are allocated to a third party after the shareholders were allocated. Since the director of Ireland allocated the convertible bonds to a third party without a special resolution of the general meeting of shareholders, the court below did not deliberate and decide at all, but did not err in the misapprehension of law, misunderstanding of legal principles, and reasoning.

C. The violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Misappropriation of Trust) regarding the issuance of Samsung S SDR bonds by Defendant Lee Jin-hee, Defendant 3, 4, 6, and 7

(1) misunderstanding of facts or misunderstanding of legal principles concerning the market price

(A) At the time of the issuance of the instant bonds with warrants, the lower court determined that: (a) Nonindicted 2, 3, and 100 won per share of Samsung 2, which were 60,000, were the actual transactional examples of Samsung 1,000, which were 60,000, and were 10,000,000,0000, 60,0000,000,000,000,000,000,000,000,000,000 1,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,00,000,00,00,00,00.

(B) In addition, according to the review and analysis by Non-Indicted 4, the price of the transaction before November 1998, which Non-Indicted 1, etc. started to provide the stock transaction or market price information of Samsung SDR, was 23,500 won. Thus, the court below should determine whether this is a market price which reflects objective exchange values, and determine whether this is an market price which reflects objective exchange values, and determine the amount of profit and loss of the crime of breach of trust of this case based on such determination, but it should be rejected that the amount of profit and loss of the crime of breach of trust of this case can not be recognized as an adequate transaction price, and the failure to review and determine whether 23,500 won per share is a normal transaction price reflecting exchange values of Samsung SDR is a crime of misconception of facts due to insufficient deliberation.

(C) The supplementary assessment method adopted by the court below is a supplementary assessment method under the former Inheritance Tax Act, which is the assessment method for calculating the amount of tax, in the case of inheritance or donation between the internal company or the special related parties, and thus it is inappropriate to apply to the case of issuance of bonds with warrants by a third party, but the court below applied this to the calculation of the market price of Samsung SDR’s stocks by misapprehending the legal principles on the

(2) misunderstanding of facts and misapprehension of legal principles concerning the method of calculating damages

The court below held that ① the decline in the value of existing stocks due to dilution of the new stocks with low price, ② the decline in the value of existing stocks due to dilution and ③ the decline in the value of the new stocks with low price, but is not the effect arising from the dilution effect of the new stocks issued at low price, etc., which is not the effect that the dilution effect actually arises from the issuance of new stocks. Considering the dilution effect, it would result in the reduction of the amount of profits acquired as a result of the misappropriation act by the misappropriation or third party to the existing stockholders, or the deduction of the amount of losses acquired from the existing stocks without deducting the amount of profits acquired from the dilution of the existing stocks as a result of the dilution act, not the amount of losses acquired from the dilution act by the dilution of the existing stocks. Therefore, it should be considered that the amount of losses arising from the dilution of the existing stocks to be deducted from the amount of profits acquired from the misappropriation of the misappropriation or the amount of losses to be deducted from the amount of profits acquired from the misappropriation act of this case.

(3) misunderstanding of facts and misunderstanding of legal principles concerning the method of calculating market price and amount of damages (whether it constitutes a violation of Article 3 (1) 1 of the Act on the Aggravated Punishment, etc

The court below held that the amount of damage suffered by Samsung SDR due to the issuance of the instant bonds with warrants is more than KRW 500 million but not more than KRW 5 billion, and that this part of the facts charged is not guilty, but can only be discussed as a violation of Article 3 (1) 1 of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes. However, since the statutory punishment is “a limited term of not less than three years,” it constitutes “a limited term of not less than three years,” the statute of limitations pursuant to Article 249 (1) 3 of the former Criminal Procedure Act (amended by Act No. 8730 of Dec. 21, 2007) is seven years, and the time of the issuance of the bonds with warrants is 7 years, which is the time of issuance of the bonds with warrants, and since the special prosecutor's prosecution was instituted on Apr. 17, 2008, the court below's judgment of the court below as to the damages amount of Samsung 50 billion, which was completed due to the special prosecutor's breach of trust.

D. Violation of the Act on the Aggravated Punishment, etc. of Specific Crimes (tax) by Defendant this case, Defendant 3, 4 and 8

With respect to the part of the evasion of capital gains tax on the borrowed stocks acquired before December 31, 1998, the court below held that only the receipt of dividends, the sale of stocks, and the closing of the account was conducted, and that there was no active concealment without any deliberation on the subsequent circumstances, the court below erred in the misapprehension of legal principles as to the "Fraud and other unlawful act", and that the court below erred in the misapprehension of legal principles as to "the facts of the management of the borrowed name account (the re-entry of the borrowed name account after the sale of the borrowed name stocks) of the defendants," which was admitted as evidence as evidence of conviction. In addition, if the purport of the original judgment is that the purpose of the original judgment is that the time of the acquisition of the borrowed name stocks shall be determined as at the time of the sale of the stocks, it goes against the legal principles that the time of the crime of tax evasion and the criminal intent shall be determined as at the time of the sale of the stocks, and the judgment of the court below is inconsistent with the part that judged the intention based on the time of the borrowed name stocks and the reasons for the crime.

E. Unreasonable sentencing

In light of various sentencing conditions, including the fact that the nature of the crimes committed by Defendant Lee Jong-hee, Defendant 3, 4, and 8 is poor, the sentence against the above Defendants is too uneasible.

II. Determination on the grounds of appeal in relation to the issuance of IBland convertible bonds by the special prosecutor and the issuance of Samsung SDR bonds

1. The judgment of the court below

The court below determined as follows: (a) where a stock company issues convertible bonds or bonds with warrants at a price lower than the reasonable price in determining the conversion price or the exercising price of the preemptive right to new stocks, there is no damage to the company; (b) however, since there is a drop in dominance and a drop in stock value to the existing shareholders; (c) if convertible bonds, etc. are issued by the method of shareholders allocation, it would be unlikely for the existing shareholders to discuss the loss or loss of the company; (d) however, if issued by the third party allocation method, it would affect the existing shareholders’ interest and share value; (e) thereby, it would affect the existing shareholders’ interest infringement, i.e., the existing shareholders’ interest related to the structure of capital, and such existing shareholders’ interest can be deemed as the company’s loss; and (e) the existing shareholders’ loss would be attributed to the company by the low price issuance pursuant to Article 424-2 of the Commercial Act, and thus, the above loss may be included in the company’s representative lawsuit.

2. Judgment of the court below

In light of the fact that the issuance of new shares or bonds with warrants (hereinafter “new shares, etc.”) with the character of new shares or potential shares constitutes a capital transaction, so-called capital transaction takes place between the company and the investor, and thus, the issue price, conversion price, and exercise price (hereinafter “issuance price, etc.”) of the company’s management at a lower price than that of the company’s issuance of new shares, etc., even if the company’s manager (director, etc.) paid less than that of the company’s issuance at a reasonable price, this is irrelevant to the company’s profits and losses. The principle of capital adequacy under the Company Act provides that the company’s incorporation or issuance of new shares, etc. shall actually contribute to the amount of the shares subscribed by the investor, etc.; whether the increase in the capital was made or not; whether the amount of the new shares, etc. was included in the business judgment of the board of directors; and in cases of issuing new shares, etc. for the purpose of transferring control over the company’s issuance of new shares, etc., the reasonable price can be determined for the same purpose as the issuance price of the company’s.

However, when new shares are issued at a price lower than the reasonable price, or when new shares are issued due to the exercise of convertible rights to convertible bonds, or the exercise of preemptive rights to bonds with warrant after the issuance of convertible bonds or bonds with warrant, the value of the existing shares will decline due to dilution, and the value of new shares will decline as much as the value of the existing shares has decreased.

However, since new shares are issued fairly to shareholders in accordance with the principle of the equality of shareholders, shareholders suffer losses due to a decline in the value of existing shares due to the low-price issuance, while shareholders gain profits equivalent to the same amount due to the increase in the value of new shares, and offset damages and losses therefrom. Therefore, there is no loss of understanding between shareholders and there is no change in the value of shares, and there is no change in the value of shares, and thus there is no loss to shareholders or company.

However, in the issuance of the third party allotment method, the existing shareholders who hold existing shares suffer loss due to the decline in the value of the existing shares, and the new shareholders who hold new shares gain profit equivalent to the same amount due to the increase in the value of the new shares. In other words, the effect that the father of the existing shareholders transfer to the new shareholders may arise. For this reason, the Commercial Act provides that the issuance of new shares or convertible bonds and bonds with warrants by the third party allotment method is stipulated in the articles of incorporation or requires a special resolution of the general meeting of shareholders (Articles 418(2), 513(3), and 516-2(3) of the Commercial Act). From the standpoint of the company, since the issuance of new shares is the same as that of the company is made to the shareholders or a third party, if there is a interest in the company, there is no reason to provide that the above requirements are necessary only in the case of issuance by the third party allotment method.

As such, the issuance of the third party allotment method causes damages to the existing shareholders due to the decline in the value of the existing shares. The court below, based on the provision of Article 424-2 of the Commercial Act, may include the above losses to the existing shareholders as damages to the company. However, the shareholders and the company have a separate legal personality, as well as the losses to the shareholders and the company are not identical (see Supreme Court en banc Decision 83Do2330, Dec. 13, 1983). Thus, the existing shareholders' losses cannot be included as damages to the company on the sole basis of the provision of Article 424-2 of the Commercial Act (see Supreme Court Decision 83Do230, Dec. 13, 1983). According to the view that the profits of the company are the totalization of the profits of the existing shareholders, the losses of the existing shareholders and the profits of the new shareholders are equal to that of the company. Ultimately, the court below held the company liable for damages to the existing shareholders for the purpose of tax evasion as in this case.

In the case of the issuance of shares at a low price, the special prosecutor asserts that if shares are issued at a reasonable price in the same quantity as the quantity of shares, the difference between the funds that would have been introduced into the company and the funds that would have been introduced at low price will result in the company. However, as seen above, it cannot be deemed that such losses have occurred to the company. Furthermore, as alleged by the special prosecutor, inasmuch as the funds that would have to incur losses from the issuance of shares at low price are not introduced as alleged by the special prosecutor, from the standpoint of the company, the same applies to the issuance of shares by a third party, but the same applies to the company. Therefore, in the case of the issuance of shares at a low price, it is unreasonable to determine the issue price at a higher price than the par value, and thus, it is contrary to a common view that even if the shares are issued at a low price, it would not be deemed that losses would occur to the company, as alleged by the special prosecutor, and ultimately, it would result in the previous shareholders' unjust profits such as the company's new shares being compensated (Article 403).

Therefore, the court below is just in determining that the issue of the method of distributing the shares cannot be deemed to have caused damage to the shareholders or the company in the issuance of the method of allocating the shares, and the issuance of the third party allocation method cannot be deemed to have caused such damage to the company, but the part which judged that the existing shareholders' damage was caused to the existing shareholders is just, but the part which determined that the existing shareholders' damage in the issuance of the method of allocating the new shares can be included in the company's damage.

However, the lower court did not err by misapprehending the legal doctrine as asserted by the special prosecutor, and thus, this part of the special prosecutor’s assertion is without merit.

Ⅲ Judgment on the grounds for appeal as to the violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Misappropriation of Trust) with respect to the issuance of Iland convertible bonds by the special prosecutor

1. Summary of this part of the facts charged

Defendant Samsung-hee served as the president of Samsung Group, who is a major business group from December 1, 1987. From February 28, 1994 to March 31, 2005, Defendant Samsungland’s director. Defendant 2 is the president of Samsung Group from October 1993 to December 31, 1996. Defendant 3 was the vice president of the Burland from August 28, 1994 to March 5, 197; Defendant 3 was the vice president of the Burland from around August 1996 to around December 28, 1997; Defendant 5 was the director of the finance division from around December 193 to the head of the finance division from around December 199 to the head of the finance division; Defendant 1 was the director of the finance division from around 193 to the head of the finance division; and Defendant 5 was the head of the finance team from around 197 to the head of the finance division; and Defendant 1 was the vice president of the finance team from around 197.

Defendant Lee Ho-hee, Defendant 2, 3, and 5, and Defendant 4 met the total amount of assets at the time of meeting KRW 80 billion, and ordered the transfer of the control right in Ireland to Lee Jae-chul by issuing the convertible bonds of the said Nonindicted 5 and 6 on a very low price basis and allocating them to Lee Jae-chul, who are merely 3.536 billion won in the size of capital, and thus it is easy to secure the control shares, while the large-scale facility investment of KRW 580 billion was made in a large amount of cost, and the size of capital is only 3.56 billion, and thus, it is easy to secure the control shares.

In such a case, Nonindicted 5 and Nonindicted 6, the representative director of the Ireland, and the head of the management support office, have the duty of due care as a good manager. In other words, in order to issue the convertible bonds with a third-party allotment method, they must undergo the special resolution procedure of the shareholders' general meeting, and shall not issue and allocate the convertible bonds for the purpose of transferring the company's control right, and shall notify each shareholder of the amount of the convertible bonds with the right to subscribe, issue price, conditions of conversion, details of the shares to be issued due to conversion, the period during which the conversion may be requested, and the purport that his/her rights shall be forfeited if the convertible bonds are not subscribed by a specified date. In particular, in determining the conversion price, it shall be examined the cases where the shares of Ireland were traded and the transaction price thereof, the cases where the corporate shareholders have assessed the value of the shareholders of the Ireland, and the basis for its assessment, and shall be requested to an objective institution such as a specialized accounting corporation and an appraisal institution to apply the reasonable conversion price.

Nevertheless, Non-Indicted 5 and Non-Indicted 6 violated the above 1 duty, and do not need to raise more than 70 billion won, Non-Indicted 1 and Non-Indicted 1 and 6. The board of directors meeting held on October 30, 1996 and held a board of directors meeting for the issuance of convertible bonds at 00,000 won less than 17 directors, with the total amount of 9,954,590,00 won, and the allocation method of 97% less than 9,000 won per 60,000 won for each of the above 70,000 won shares. It is so decided that the board of directors meeting held 97,000 won less than 9,000 won per share of non-Indicted 1 and 97,000 won per share of non-Indicted 60,000 won (the above resolution of the board of directors is no longer effective than 97,000 won per share of non-Indicted 1 and 96,06.

As a result, South-North Korea had 106,656,045,00 won (i.e., 85,000 won x 1,254,777) equivalent to the actual value of the above acquired stocks and 9,61,810,000 won of the acquisition price of convertible bonds paid in Ireland and 9,661,810,000 won of the acquisition price of convertible bonds paid in Ireland, and had Baland have suffered damages equivalent to the same amount.

2. Details and purpose of the issuance of the instant convertible bonds;

The following facts can be acknowledged according to the evidence duly adopted and examined by the court below and the court below.

(1) On December 23, 1963, Ireland was an affiliate company of Samsung Group, an affiliate company of Samsung Group, which was established around December 23, 1963 and engaged in business such as facility business, landscaping business, and distribution business for tourists. The total number of issued stocks prior to the issuance of the instant convertible bonds was KRW 707,200, face value was KRW 500, face value was KRW 500,000, and capital was KRW 3.536 million.

(2) Defendant 1 served as the Chairman of Samsung Group, which is the Large Enterprise Group, from December 1, 1987 to March 31, 1994. Defendant 2 worked as a Director of Ireland from February 28, 1994 to March 31, 2005. Defendant 2 is the Chairman of Samsung Group, from October 1993 to December 1996, and was serving as the Auditor of Ireland’s auditor from February 28, 1994 to March 5, 197. Defendant 3 is the Deputy Director from August 28, 1996 to September 197, 197, and Defendant 5 was working as the Director of Ireland’s Deputy Director from around 197 to around 29, 197, and was working as the Director of Ireland’s Deputy Director from around 193 to around 197, 197, and Defendant 5 was working as the Director of the Financial Planning Team from around 193 to 1997.

(3) In the 1990s, Ireland has established a plan to take place in the world as theme park, and has made a large-scale investment for the renovation and repair of the deteriorated facilities and the construction of new facilities, such as capitals, etc. In particular, approximately KRW 150.1 billion in 1995, approximately KRW 286.8 billion in 196, KRW 132.7 billion in 197. The above investment was procured through a long-term and short-term loan from financial institutions, issuance of corporate bonds, etc., which led to two consecutive years in the time of the issuance of the instant convertible bonds. The debt also increased continuously after November 1, 1996, and became KRW 7,41.1 billion in around the same year.

(4) However, as of the end of 196, at the time of the issuance of the instant convertible bonds, Liber has reached an amount equivalent to KRW 83.7 billion in total assets, KRW 1,58.1 billion in total capital. Based on the financial statements on December 31, 1996, Liber has maintained a very high credit rating of CP A3 + (i) credit rating from the Korea Credit Rating Company, (ii) subject to evaluation A3 credit rating from the Korea Credit Rating Company, and (iii) at the interest rate of KRW 30 billion from 11.98% to 12.65%, which is the general market interest rate in 195, and (iv) had received guarantee from the Korea Credit Rating Company on June 12, 1996, and there was no need for the issuance of the instant convertible bonds from the financial institution on a short-term loan of KRW 50 billion in total, KRW 100 billion in total, KRW 300,000,000 in total,00.

(5) Around May 196, Liber predicteds the balance of funds for the one-year period. Around October 1996, Liber borrowed money from a subsidiary around 51.8 billion won of a short-term fund, around November 1996, and around 25.7 billion won of a short-term fund, and was planned to repay each of the obligations to banks and 23 billion won of a short-term loan. However, around May 1996, Liber’s short-term loan was planned to issue the instant convertible bonds around 192.6 billion won, around 196, around 196, around 196, around 196, and around 2,179 billion won of a short-term loan, around 196, around 196, around 2,37 billion won of the total amount of the short-term loan, but the ratio of the short-term loan to the total amount of the loan decreased by 1 billion won around 196.7.6.4.6.96.

(6) There was no fund raising by the method of the issuance of the instant convertible bonds before and after the issuance of the instant convertible bonds, and there was no fund raising by the method of the issuance of the instant convertible bonds, and there was a plan to establish and implement the fund raising plan in advance on a monthly, quarterly, and yearly basis with respect to the necessary funds. The instant convertible bonds did not have been issued at all even in the aforementioned prior financing plan and “the fund plan for October” prepared around September 25, 1996.

(7) However, around October 196, Non-Indicted 6 instructed the business management team (the team leader Park Byung-young and the head of the team) to devise a financing plan on the ground that the loan increased to approximately KRW 320 billion due to large-scale financing requirements for the improvement, repair, etc. of the worn-out facilities in Ireland, and that approximately KRW 77 percent of the loan was short-term loans, and it is urgent to secure low-interest long-term stability funds, and it is necessary to expand less capital ( KRW 3.536 billion) compared to the size of the Burland.

(8) The business management team shall investigate and analyze the current state of market interest rate at the time of the conversion to Nonindicted 6, the prospect of the future fund market, the actual examples of the issuance of convertible bonds by domestic companies, and based on this analysis, there is a problem that the issuance of convertible bonds among them may result in a change in the composition of shareholders by comparing the capital increase, the issuance of corporate bonds, and the short point of the issuance of convertible bonds, but it shall be promoted through consultation with the existing shareholders. The scale of the issuance of convertible bonds shall be about 10 billion won, and the issuance of convertible bonds shall be KRW 6.46 billion after conversion shall be determined at the conversion price for the convenience of the management of capital in preparation for conversion. In this case, the conversion price shall be KRW 700, the issue price shall be KRW 1,292,800, and the issue price shall be deemed to be adequate (Review of the financing plan on October 1, 1996).

(9) On October 25, 1996, Non-Indicted 5 and 6 et al. approved the “written corporate bond issuance (the 9th letter)” made on the basis of the above report and presented it to the board of directors on October 30, 1996.

(10) According to the minutes at the time, the board of directors of Ireland resolved to issue convertible bonds. The main contents are as follows.

· Types of bonds: Unguaranteed convertible bonds with non-registered interest coupon;

· Total face value of bonds 9,954,590,000

· The total amount of issuance of bonds: 100% of the face value of the bonds;

· The base date for allocation of bonds: November 14, 1996

· Method of allocating bonds: A third party allocation by the resolution of the board of directors when forfeited after preferential allocation by shareholders;

· Amount of each corporate bond: class 4 of KRW 00,000,000 per day, KRW 00,000, KRW 000,000;

- Interest rate of bonds: 1% per annum from the date of issuance of bonds to November 29, 199: Provided, That the rate of return on guarantee for the bondholders who have not exercised the conversion right by the due date for repayment of principal of bonds shall be 5% per annum.

· The repayment method and deadline of the principal: The amount equivalent to 112.61% of the principal of the bonds shall be repaid at once on November 29, 199: Provided, That if the repayment deadline is a bank holiday, it shall be the next business day.

· The purpose of use of funds: Facility Fund

· Matters concerning conversion: The number of stocks calculated by dividing 100% of the face value of each bond by the converted price shall be the number of stocks to be converted, and less than one share shall be paid in cash when stock certificates are issued, but the conversion price of bonds shall be 7,700 won per share.

· Types of shares to be issued upon conversion: Registered common shares

· The period of request for conversion: The date following the issuance of bonds to the date immediately preceding the redemption date.

· Place at which conversion is demanded: Abandland business management team

(11) However, according to the Articles of Ireland’s articles of incorporation, the agenda items of the board of directors were stipulated to be attended by a majority of the directors and the resolution of a majority of the directors present at the time. At the time, 17 directors of Ireland were held on October 30, 1996. However, the minutes of the board of directors held on October 30, 1996 stated “Non-Indicted 5 shall attend the chair and declare that he/she was sexually present at the meeting of nine directors, including Non-Indicted 5, 6 and Cho Jae-ho, etc., and then the resolution shall be passed with the consent of all the directors present at the meeting.” However, among the directors, the list of the minutes of the board of directors was made under the condition that the above resolution of the board of directors was below the quorum.

(12) At the time of the issuance of the instant convertible bonds, the corporate shareholders in Ireland were affiliates or affiliates of Samsung Group, and were separated affiliates and one foundation. The individual shareholders were the chairperson of Samsung Group, the chairperson of Samsung Group, and 17 executives and employees of Samsung Group, including the former and present officers and employees of Samsung Group, and the amount allocated to each shareholder is as follows.

· Central Assistant Corporation: 4,801,660,000 won

· The first parent corporation: 1,407,610,000

· Samsung C&T Co., Ltd.: 520,780,000

· Samsung Cultural Foundation: 309,960,000 won

·No. 292,780,000 won

· Han-gu District Corporation: 94,300,000 won

· Hando Construction Corporation: 95,710,000 won

· Han Chemical Co., Ltd.: 91,490,000

·New World Department Store: 22,520,000 won

· 1,310,020,000

· Total amount of individual shareholders: 1,007,760,000

(13) The first-party company expressed its intent to subscribe to the pertinent convertible bonds (2.94% of the total amount of the issued bonds), but the shareholders and individual shareholders of the remaining corporation, except the first-party company, did not subscribe to the subscription to the pertinent convertible bonds (97.06% of the total amount of the issued bonds) until December 3, 1996, which is the due date for the subscription of the convertible bonds.

(14) On December 3, 1996, Nonindicted 5 and 6 held a board of directors at around 16:00 on and after December 3, 1996, present an agenda to assign each of the amount of KRW 4,830,910,00 to Lee Jae-hee’s Lee Jae-hee’s Lee Jae-hee’s Lee Jae-hee’s children, and Nonindicted 7,8,610,300,000, respectively. They are written in the minutes of the board of directors with the consent of all the nine directors present at the time.

(15) Lee Jae-il, etc. subscribed to underwrite at least 17:00 on the date of allocation and paid the subscription price for acquisition at least 17:23. After that, Lee Jae-in, Nonindicted 7, 8, and 9 were used in Japan on December 17, 1996, and Nonindicted 10 exercised the right of conversion from the Japanese colonial Party on December 11, 1996, and exercised the right of conversion at around March 1997, and accordingly, the shareholder composition of Liber was modified as indicated in the “Stland Change List of Stockholders.”

(16) Meanwhile, as a support organization for exercising management control over each affiliate by comprehensively controlling the group, the group’s office took overall charge of planning and coordination of each affiliate upon the direction, delegation, and comprehensive delegation of the president’s order. The company’s office was an important task of increased capital, convertible bonds, and bonds with warrants, which may cause a change in the corporate governance structure of the affiliate itself, or corporate governance among the affiliates in the mutual name or in the circular investment relationship, and its monitoring and supervision over the issuance of bonds with warrants, etc. were decided after the consultation with the office of the office of the office of the office of the office of the secretary-general. The issue of the instant convertible bonds was conducted under close consultation between the officers of the group’s office of the secretary-general (including the president) and the executive officers of the Ireland. On December 3, 1996, the office of the secretary-general set forth and notified that the forfeited bonds were underwritten by the third party at the ratio of 31:11 of the instant convertible bonds and notified that the third party’s forfeited bonds were underwritten.

B. Purpose of issuing the instant convertible bonds

In full view of the above facts, the purpose of issuing the convertible bonds of this case was not to raise funds, but to transfer control over the company to Lee Jae-ran while avoiding taxes, such as gift tax.

3. Judgment ex officio on the grounds of appeal

Before determining the grounds for appeal by the special prosecutor, this paper examines ex officio the reasons for appeal by the special prosecutor.

After deeming that the instant convertible bonds were issued as a shareholder allotment method, the lower court determined that the Defendants 1, 2, 3, 5, and 4’s violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Misappropriation) related to the Burland convertible bonds did not constitute a crime of breach of trust on the ground that the Defendants 1, 2, 3, 5, and 4 did not have any proof of a crime, since the Defendants 2, 2, 3, 5, and 6 did not have any duty to determine the conversion price in consideration of the stock value at the time when the Plaintiff, the representative director of the Burland, and Nonindicted 6, etc., were unable to be deemed to have been the duty to determine the conversion price in accordance with the aforementioned legal doctrine.

However, according to the legal principles as seen earlier, even if the convertible bonds of this case were issued at a price lower than the reasonable price as stated in the facts charged, it cannot be deemed as having caused the same loss as indicated in the facts charged, inasmuch as the issuance of the convertible bonds with the aim of transferring the company's control at the time of avoiding taxes rather than raising funds as stated in the facts charged, it cannot be deemed that there was a loss as stated in the facts charged, in the case of the issuance of the convertible bonds with the aim of transferring the company's control at the time of avoiding taxes, or in the case of the issuance of the third party allocation method, or in the case of the issuance of the third party allocation method, it constitutes a case where there is no proof of a crime

In light of the special prosecutor’s assertion that, as a result of the issuance of the convertible bonds of this case at a low price of KRW 85,00,00, the special prosecutor argued that, at the reasonable price of the convertible bonds of this case, Ireland suffered passive damages equivalent to the amount obtained by multiplying the amount of KRW 7,700, which is the acquisition price of convertible bonds, by the amount of KRW 1,254,777, and multiplied by the amount of new shares issued by the exercise of convertible rights, as seen earlier, the special prosecutor cannot be deemed to have caused damages as alleged by the special prosecutor to Burland, even if the investment at a lower price was paid in the issuance of the convertible bonds at a lower price than the reasonable price, even if the investment at a lower price was paid in the issuance of the convertible bonds at a lower price than that at a reasonable price, the damages for occupational breach of trust include positive damages reduced in the existing assets and passive damages that could not be acquired in the future at the time of the issuance of the convertible bonds (see Supreme Court Decisions 2003Do3516, Oct. 10, 2074, 2007).

Therefore, even if the grounds for appeal by the special prosecutor are accepted in entirety, since this part of the facts charged falls under the case where there is no proof of crime, the above judgment of the court below is justified in its conclusion.

IV. Judgment on the grounds of appeal as to the violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Misappropriation) in relation to the issuance of Samsung SDR bonds by the special prosecutor

1. Summary of this part of the facts charged

Defendant 1 served as the president of Samsung Group, who is the Large Enterprise Group from March 1, 1987 to March 18, 200. Defendant 3 works as a director of Samsung SDR from March 27, 1998 to March 18, 200. Defendant 3 served as the head of the Strategic Planning Office from March 18, 197 to March 18, 2006 through the head of the Samsung Group Corporate Restructuring Headquarters, and from March 18, 1997 to March 18, 2000, Defendant 4 served as the auditor of Samsung SDR from around April 1998 to around January 2004, Defendant 6 was the head of the Financial Support Headquarters, the Vice-head of the Corporate Restructuring Headquarters, and the representative director of the Samsung Group from around April 27, 1998 to around March 208, 200, Defendant 6 was the head of the Samsung Group from around 2000 to July 28, 1998.

The above Defendants conspired with each other in order to commit the following acts.

around February 199, Samsung SDR was established on May 1, 1986 for the purpose of "sale of system integration services, provision of data processing and information and communication services using computers, development and sale of software, and communication and Internet-related business," and on December 31, 1998, the total number of shares issued is KRW 12 million as of December 31, 1998, the shareholder is Samsung Electronic Co., Ltd. (29%) Samsung C&M Co., Ltd. (25.3%) Samsung Electrical Co., Ltd. (1.7%) Samsung Power Co., Ltd. (18.3%) E&S (18.3%) E&S (7.5%) and Non-Indicted 7 (2.5%) and Non-Indicted 9 (2.5%) as the shareholders of Samsung Group's major affiliates are in charge of managing Samsung Group's computer facilities, and it is clear that it is necessary for Samsung Group to improve its business performance within 1000% of Samsung Group's capital stock growth or KOSDAQ-related business performance.

around February 199, Defendant 4 had Nonindicted 11 transfer the above issuance plan to Samsung SDR, and he reported it to Defendant 3, who is the chief restructuring officer, and Defendant 3 reported the above plan to Defendant 3, who was the chief restructuring officer, and Defendant 3 instructed Defendant 3 and Defendant 4 to join as the underwriter of the bonds with warrants as well as to the plan to promote such plan.

On the other hand, Defendant 7, who received the issuance plan for the instant privately placed bonds from the Financial Team around February 199, ordered the financial team to collect data on the company’s financial situation and issue the privately placed bonds to Nonindicted 13 of the management support team leader of Samsung SDS and Nonindicted 12 on behalf of the financial team in charge of the re-major team to the purport that it is necessary to issue the privately placed bonds under the pretext of securing urgent facility funds. On the other hand, Defendant 7 reported the process of issuing the privately placed bonds to Defendant 6, the representative director of the financial team of the Restructuring Headquarters, as ordered by the Financial Team of the Restructuring Headquarters.

On February 19, 199, according to the orders of Defendant 7, Nonindicted 12 prepared a “1/4 quarter emergency financing plan” with the purport that “SDR needs to secure funds for the system management business (SM business) and funds for the redemption of CP and debentures, and the amount of funds to be urgently secured by the end of February shall be at least 59 billion won, and 30 billion won among them shall be favorable for the issuance of privately placed bonds with warrant and the remaining 29 billion won to be procured through public offering of new bonds,” and obtained approval from Nonindicted 13 and Defendant 7 on February 20, 199, and in the process, Nonindicted 12 requested an appraisal of the stocks of Samsung Accounting Corporation on February 2, 199 and requested an appraisal in accordance with the Inheritance Tax and Gift Tax Act.

Unlike Defendant 4 and Nonindicted 11 initially planned on February 22, 1999, the instruction to see Defendant 3 and Defendant 4 and Defendant 4 was delivered in sequence to Defendant 7 and 6 at that time through Defendant 3 and 4, and Nonindicted 12 obtained approval of Defendant 7 on February 24, 199, following the instruction of Defendant 7, on February 23, 199, on the following: (a) it is necessary to separately issue bonds with warrants of KRW 23 billion in accordance with the size of the initial funds; and (b) it was necessary to separately issue bonds with warrants of KRW 23 billion in accordance with the size of the bonds with warrants of six persons, including Defendant 3 and Defendant 4; and (c) it was approved on February 24, 199.

At the time of February 199, Defendant 6, as the representative director of Samsung SDR, has overall control over the overall management of the company, and Defendant 7, as an executive officer in charge of the financial affairs of the company, was practically responsible for the financial affairs of the company. As such, the resolution to issue the bonds with warrants of this case and the execution of the issuance of the bonds with warrants of this case requires normal decision-making procedures as prescribed by the articles of incorporation and statutes, and there was a duty to perform the duty of due care as a good manager by strictly examining the necessity of such bonds and the size and contents of the bonds to be issued, and making a reasonable decision.

At the time of February 199, SamsungS has increased its profitability since 1998, and entered about 20 billion won in its net income for that year, and about 309.9% in its ordinary profit increase, its liabilities decreased by 4.7 billion won compared to the end of 1997, its equity capital increase by 14.7% to 18.5% in its equity capital increase by 14.7% in its total capital increase by 578% to 439% in its total capital increase by 1.7% in total capital increase, its net profit ratio from 11.80% in electricity to 42.89% in the case of its issuance of new shares, and its net profit ratio should be 1.9% in the case of its issuance of new shares, and its net profit ratio should be 42.8% in the case of its issuance of new shares, and its net profit ratio should be 10.9% in the case of its issuance of new shares to the maximum extent possible in the case of its issuance of new shares.

Nevertheless, Defendant 6, 7 et al. violated their duties and closely examined whether Samsung 2 requires urgent funds, and the instant bonds with warrants were transferred at low prices to Defendant 3 and 4, and the shares of Samsung Electronic Co., Ltd. (29.9%) were to be reduced to 23.6% prior to 14.8% to 25.4%, and the total shares of Samsung 20 billion won were to be increased to KRW 70 billion to KRW 70,000,000,000,000,000,000 KRW 70,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,00,000,00.

The directors present at the board of directors, including Defendant 6, 7, etc., determined the exercising price of the Samsung 5's stocks to KRW 7,150 per share as of January 1, 1999 according to the supplementary assessment method prescribed by the Inheritance Tax and Gift Tax Act, which was in force at the time, without considering all such factors as whether there was a normal transaction case of Samsung 5's stocks when calculating the stock price of Samsung 5's stocks, and whether the price indicated in the transaction case was appropriately reflected. The stock price of Samsung 5's stocks was 7,150 per share during the period from February 10, 199 to March 15, 199, up to 30,000 to 90,000 won per share during the period from 10,000 to 30,000 won per share, and the average trading price of Samsung 9's stocks was 90,000 won per share during the period from 10, 1999 to 197.

After all, Defendant 1, Defendant 6, and Defendant 7 were directors of Samsung 5 x 70 x 5 x 40 x 5 x 70 x 5 x 30 x 5 x 40 x 5 x 7 x 5 x 46 x 7 x 5 x 5 x 30 x 5 x 46 x 5 x 7 x 5 x 5 5 x 5 x 5 x 5 5 x remaining 5 x 40 x 5 x 5 x 5 x 5 x 5 5 x 5 x 5 5 x 5 x remaining 5 - remaining 5 x 10 x 5 x 5 - remaining 5 - remaining 5 - remaining 5 x 30 - remaining 45 - 75 - 74 ,75 - 5 7

2. Details and purpose of the issuance of the instant bonds with warrants;

The following facts can be acknowledged according to the evidence duly adopted and examined by the court below and the court below.

A. Details on the issuance of the instant bonds with warrants

(1) SamsungS was established on May 1, 1986 for the purpose of “the sale of system integration services, the provision of data processing and information and communications services using computers, and the operation of computer and communication and Internet related business, including software development and marketing.” On December 31, 1998, the total number of shares issued as of December 31, 1998, the total amount of KRW 12 million, the capital of KRW 60 billion, the shareholders were Samsung Electronic Co., Ltd. (29.9%) Samsung Heavy Industries Co., Ltd. (25.3%) Samsung Heavy Industries Co., Ltd. (11.7%) Samsung Power Co., Ltd. (1.7%), employee stock ownership association (18.3%), transferred materials (7.3%) (7.5%)), Nonindicted 7 (2.5%) Nonindicted 8 (2.5%) and Nonindicted 9 (2.5%). It was clear that Samsung Group’s major affiliates were in charge of rapidly managing the computer room of Samsung Group’s major affiliates, and it was very important within 98th infrastructure development and business performance.

(2) The defendant Lee Jong-hee was in office as the chairperson of Samsung Group, a large business group, from December 1, 1987 to March 18, 190. The defendant Lee Jong-hee was in office as a director of Samsung SDR from March 27, 1998 to March 18, 200. The defendant 3 was in office as the head of the strategic planning office from March 1, 2006 to March 18, 2006 through the head of the Samsung Group Corporate Restructuring Headquarters, from March 18, 1997 to March 18, 200. The defendant 4 was in office as the head of the Financial Support Headquarters, the Vice-head of the Corporate Restructuring Headquarters, and the representative director of the Samsung Group from March 27, 1998 to January 2004, and the defendant 6 was in office as the head of the Samsung Group from March 28, 198 to March 28, 2008.

(3) On February 199, Defendant 7 instructed Nonindicted 13 and Nonindicted 12 in charge of the management support team leader of Samsung SDR to collect data on the company’s financial situation and to issue privately placed bonds with warrants in order to raise funds for urgent facilities. On the other hand, Defendant 7 reported the process of issuing privately placed bonds with warrants to Defendant 6, the representative director, during the pertinent month.

(4) On February 19, 199, upon Defendant 7’s order, Nonindicted 12 prepared a “1/4 quarter emergency financing plan” with the purport that “SDR needs to secure funds for system management business (SM business) and funds for redemption of CP and company bonds, and the amount of funds to be urgently secured by the end of February shall be at least 59 billion won, and 30 billion won among them shall be favorable for the issuance of bonds with warrants through private placement and the remaining 29 billion won to be procured through public offering,” and approved by Nonindicted 13 and Defendant 7 on February 20, 199, and during that process, Nonindicted 12 requested an appraisal of the stocks of Samsung SDR to be conducted by the KNS accounting corporation on February 2, 199, and evaluated it in accordance with the Inheritance Tax and Gift Tax Act.

(5) On February 23, 199, according to the orders of Defendant 7, Nonindicted 12 confirmed the “issuance of privately placed bonds with warrants” by modifying the initial size of funds to the effect that it is necessary to issue bonds with warrants of 23 billion won in a separate form in accordance with the size of funds between Lee Jae-sik, who will be subscribed to the issuance of bonds with warrants on February 23, 199 and six persons, including Defendant 3, Defendant 4, etc.

(6) At the time of February 1999, Samsung SDR increased its profitability from 1998, and entered about 20 billion won in net income for that year, and around 309.9% in net income for that year. The debt was reduced to 47.7 billion won as of the end of 1997, and its equity capital increased to 14.7% to 18.5% in equity capital. The debt ratio also decreased from 578% to 439% in total capital. The ordinary profit ratio for equity capital was 1.7% in total, from 1.87% in total, from 11.80% in total, from 42.89% in total, from 11.80% in total, from 11.80% in total, from 42.89% in total, from 0.94% in total to 2.8% in total, from 08% in total, the net profit ratio compared to the net profit ratio was considerably needed in the financial situation of Samsung Corporation.

(7) On February 25, 199, Defendant 6, 7, etc. presented to the board of directors the proposal for the issuance of privately placed bonds with warrants. The board of directors resolved to issue bonds with warrants with a summary of “the period for exercising preemptive rights shall be from the date one year has elapsed after the issuance of the bonds to the date immediately before the repayment date” to the effect that “the bonds with non-guaranteed bonds with warrants with the face value of KRW 23 billion shall be issued through private placement, and the interest rate shall be 8% per annum, and the total amount of the bonds shall be underwritten. The redemption of the bonds shall be made at once at maturity, and the acquiring company may dispose of the bonds separately from the bonds and preemptive rights. The exercising price of the preemptive rights shall be KRW 7,150 per each bond with the total amount of the bonds.”

(8) Samsung SDR issued bonds with warrants in total face value of KRW 23 billion on February 26, 200 following the following day, and SDR Co., Ltd. (hereinafter “SK securities”) acquired the bonds from Samsung SDR in total amount of KRW 23 billion on the same day, and sold the bonds to Samsung Securities Co., Ltd., which were planned to be an intermediate underwriter in the face amount of KRW 21,820,100,000, divided into corporate bonds and warrant certificates into corporate bonds, and sold the bonds to the Samsung Securities Co., Ltd., Ltd., which was planned to be an intermediate underwriter in the face amount of KRW 21,820,100,000,000. Samsung Securities transferred the same value without fees to Lee Jae-il, 7,8,9,900,000,000,000,000,000,000 won in total

(9) Afterwards, etc. acquired 7,150 won per share of Samsung SDR’s total shares of 3,216,780 shares (657,342 shares, 7, 8, 9 each of 475,524 shares, Defendant 3, 75,244 shares, and 437,762 shares) by exercising the preemptive right of this case. As a result, it acquired 21.1% of the shares issued by SamsungS’s shares of 14.8% and added 32.9% shares in the previous shares of Samsung C&S to 32.9% (the aggregate shares of 25.4%).

(10) Meanwhile, there was an important task of monitoring and supervising the issuance of convertible bonds, bonds, bonds with warrants, etc., which may cause changes in the corporate governance structure of an affiliate itself or cause changes in the corporate governance structure of an affiliate, and the affairs of monitoring and supervising the issuance of convertible bonds, bonds, and bonds with warrants, etc. were determined after consultation with the office of the management support of each affiliate. The issuance of the instant bonds with warrants was conducted under close consultation between the officers of the group non-office (including the chairperson) and the officers of Samsung SDR. On February 22, 1999, the non-office financial team determined that the instant bonds with warrants were underwritten by 4, Defendant 3, and 4 et al. and notified Samsung SDR that the instant bonds with warrants were transferred to 6 persons, etc. Accordingly, the instant bonds with warrants were transferred to 6 persons, etc.

B. Purpose of issuing the instant bonds with warrants

In full view of the above facts, the purpose of issuing convertible bonds with respect to the preemptive right of this case was not to raise funds, but to transfer control over the company to victims while avoiding taxes, such as gift tax.

3. Ex officio determination

Before determining the grounds for appeal by the special prosecutor, this paper examines ex officio the reasons for appeal by the special prosecutor.

After deeming that the instant bonds with warrants were issued in the third party allotment method, the court below found that the exercising price of the preemptive right was less than the reasonable price, as a result of the issuance of the new bonds at a lower price, that the damages suffered by Samsung SDR, but not more than 500 million won, and that this part of the facts charged is not guilty. However, this part of the facts charged can be prosecuted only for the crime of violation of Article 3 (1) 1 of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Article 3 (1) 2 of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Article 3 (1) 2 of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes). Since the statutory penalty is "a limited term of not less than 3 years", the court below determined that the statute of limitations was 7 years pursuant to Article 249 (1) 3 of the former Criminal Procedure Act (amended by Act No. 8730 of Dec. 21, 207), since the period of its issuance of the instant bonds with warrants was 307 years elapsed.

However, according to the legal principles as seen earlier, even if the bonds with warrants were issued at a price lower than the reasonable price as stated in the facts charged, it shall not be deemed that the bonds with warrants were issued for the purpose of raising funds, not for the purpose of raising funds, but for the transfer of control over the company, whether the bonds with warrants were issued for the purpose of transferring control over the company, or for the issuance of the bonds with warrants by a third party, or for the issuance of the bonds with warrants, it shall not be deemed that the losses were the same as indicated in the facts charged. Thus, the facts charged against the violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Misappropriation) related to the bonds with warrants related to Samsung SDR against Samsung SDR, which was premised on the occurrence of such losses to Samsung SDR, constitute a case where there is no proof

In light of the special prosecutor’s assertion that Samsung SDR’s considerable passive damages amounting to 3,216,780 shares issued as a result of the exercise of preemptive rights from the amount calculated by deducting KRW 7,150,00,000 at the market price of the bonds with warrants, the special prosecutor asserts that the special prosecutor suffered negative damages equivalent to the amount calculated by multiplying the amount of 3,216,780 shares issued as a result of the exercise of preemptive rights by the amount calculated by deducting KRW 7,150,00, the exercise price of the preemptive rights. As seen earlier, even if the amount of the exercise price of the instant bonds with warrants was less than that of the issuance of the bonds with warrants at a reasonable price, it cannot be deemed that the special prosecutor caused damages as alleged by the special prosecutor’s assertion. In addition, the special prosecutor’s assertion that the damages for the occupational breach of trust include active damages that decrease the existing assets and passive damages that could not be acquired at the time of the issuance of the bonds with warrants is not acceptable (see Supreme Court Decisions 2003Do351684, Oct. 27, 2009, supra.).

Therefore, the above judgment of the court below is erroneous in the misapprehension of legal principles as to damages caused by the issuance of the lower bonds with warrants, and even if the grounds for appeal by the special prosecutor were accepted in entirety, this part of the facts charged constitutes a case where there is no proof of crime, and thus, this part of the judgment below cannot be maintained.

V. Determination of the grounds for appeal as to the violation of the Act on the Aggravated Punishment, etc. of Specific Crimes by the Defendant and the special prosecutor

1. Summary of this part of the facts charged

Defendant 1 is a major shareholder who owns 3% or more of the shares of Samsung Electronic, Samsung Electricity, Samsung Fire and Marine Insurance, Samsung F&S (SDI), Samsung Securities, Samsung F&Swon, and Samsung C&T together with his relatives or other specially related persons, or whose total market value of shares owned by each company is at least 10 billion won. Defendant 3 is the direction and supervisor for the personal property management affairs of this case. Defendant 4 is the direction and supervisor for the personal property management affairs of this case. Defendant 4 is the direct and supervisor for the above affairs, and Defendant 8 was the head of the finance division of the Financial Coordination Headquarters from January 13, 2004, and was directly directed and supervised for the above affairs of the deceased Nonindicted 11 and 14 as the head of the financial division of the Financial Coordination Headquarters from January 13, 2004;

B. From January 1, 200 to December 31, 200, Samsung 2, 11, while managing Samsung 2 and Samsung 2’s assets, 31, including Samsung Group employees at the time of Samsung Group’s management through its account, 25, Samsung 28,526 shares, Samsung 11,150 shares, Samsung 260 shares, Samsung 2,260 shares, Samsung 2,200 shares, 6,490 shares, 67,626 shares, and 67,626 shares, and 6,68,68,753,956 shares of Samsung 2,50 shares, and 30,000 shares and 18,000 shares and 36,00 shares and 40,000 shares and 6,06,000 shares and 18,000 shares and 16,000 shares and 36,000 shares and 16,000.

2. The judgment of the court below

A. Relevant statutes and legal principles

(1) Article 9(1)3 of the Punishment of Tax Evaders Act provides that a person who evades a tax or obtains a refund or deduction of taxes by "Fraud or other unlawful means" shall be punished by imprisonment for not more than three years or by a fine not exceeding three times the amount of evaded tax. In addition, Article 8(1)1 of the Act on the Aggravated Punishment, etc. of Specific Crimes provides that a person, among them, shall be punished by imprisonment for life or for not less than five years, if the amount of evaded tax, etc. exceeds one billion won a year, and Article 9(2) of the same Act provides that a fine equivalent to not less than two times the amount of evaded tax, etc. shall be imposed concurrently.

In a case where tax evasion was done by an intentional act, it is an anti-social crime that infringes the State’s authority to impose taxes and infringes on the national tax equality, and thus, criminal punishment is imposed separately from the act of tax evasion that does not meet such requirements. Therefore, in order to acknowledge a guilty crime of tax evasion, the taxpayer should have caused the outcome of tax evasion by fraudulent or other unlawful act, and shall also be proven that there was an intentional act.

(2) However, although there is no capital gains tax liability for the income from the transfer of listed stocks under the Income Tax Act, the major shareholders of certain scope are liable to pay capital gains tax on the transfer of stocks.

In other words, with the amendment of the Income Tax Act by Act No. 5580 on December 28, 1998, Article 94 subparagraph 3 of the Income Tax Act, which provides that the transfer of stocks or investment shares listed on the Stock Exchange and prescribed by the Presidential Decree, shall be included in the taxable subject of capital gains tax (hereinafter “the provisions on taxation of capital gains tax on listed stocks of this case”), thereby being amended by Presidential Decree No. 15969 on December 31, 1998, Article 157(a) of the Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 15969 on December 31, 198, one shareholder or investor who owns 5% or more of the total amount of stocks of the stock listed on the Stock Exchange and his relative or other specially related person under Article 20 of the Enforcement Decree of the Framework Act on National Taxes, transfers the total amount of stocks of the relevant corporation (up to three years).

Meanwhile, Article 157 of the Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 16664, Dec. 31, 1999; Presidential Decree No. 16664 of Dec. 31, 199; “(1) In a case where one stockholder or one investor of a stock listed corporation, his relative, or any other specially related person owns 3% or more of the total sum of stocks, etc. of the relevant corporation as of the end of the immediately preceding business year immediately preceding the transfer date, or in a case where the total market price of stocks, etc. of the relevant corporation as of the end of the immediately preceding business year

(3) Generally, using a deposit account in another person’s name and only one of them constitutes an act of concealing related income, regardless of the motive, circumstance, etc. of a specific act. However, inasmuch as the existence or absence of all of the shares in the instant listed stocks’ transfer income tax provisions is an element of determining whether Defendant 1 was liable to pay the transfer income tax, it shall be deemed that there was an unlawful act to make it impossible or considerably difficult to impose and collect the transfer income tax in cases where the property in the name of the instant name account, such as filing a non-declaration of taxable object and making a return to several borrowed accounts or making a deposit to another borrowed account in sequence, and an exchange/rewing of means of payment, such as cash, is added with the active intent to conceal the fact that Defendant 1 was the ownership of the instant name account.

B. Facts on the premise of judgment

According to the above evidence, the following facts are acknowledged.

(1) The circumstances in which shares have been acquired in the name of a borrower;

The shares of the borrowed name securities consignment account of the Defendant Lee Byung-hee, which was indicted in the instant case, are purchased with the funds owned by the said Defendant, such as the shares that the said Defendant succeeded to the borrowed name account from the 1987 No. S. S. S. S. S. S. S. S. S. S. S. S. S.C. and other shares that he purchased with the funds owned by the said Defendant, such as shareholders dividends, etc., and shares purchased with the funds inherited from the deceased No. S. S. S. S. S. S. S. S.

(2) The status of management of borrowed accounts

The name account submitted to the special prosecutor by Nonindicted 14, who manages the Defendant Lee-hee’s personal property, was 1,042 accounts in the name of 404 persons and 152 accounts in the name of 404 persons and 1,199 accounts in the name of 486 persons. Of these, securities consignment accounts were 595 accounts and 119 accounts in the aggregate, 714 accounts in the name of 258 persons and 341 accounts in the name of 2500 to 206 among the said 714 securities accounts, which were 258 persons and 341 accounts in the name of 258 persons, the securities account, excluding the pertinent 595 accounts that had not been traded (the sum of 180 persons and 234 persons in the name of 595 accounts and 1981 persons in the name of 197 accounts).

The Samsung Group Non-Indicted 11 and Non-Indicted 14, who are responsible for the management of the personal property of the Defendant Lee Jong-hee, were in charge of the management of the said personal property during the pertinent period. Nonindicted 14, who is the successor of Nonindicted 11, took charge of the management of the said personal property, along with the analysis of financial market trends and the publication. Nonindicted 14, who is the successor of Nonindicted 11, was temporarily delivered data in the form of computer files necessary for the management of the Defendant Lee Jong-hee’s property, and the head of the Tong-hee and the card was temporarily handed over from Nonindicted 11, and was regularly handed over the management of the personal property on July 2005, which was immediately before Nonindicted 11 died. The aforementioned computer file data were arranged by the personal information of the nominal owner, the name of the financial institution, the type and amount of financial products, and the number of shares in the securities consignment account.

If it is anticipated or difficult to use the existing borrowed account due to the retirement, etc. of the nominal owner, etc., the deceased Nonindicted 11 and Nonindicted 14 sold the shares of the relevant account and withdraw them in cash, and deposited the said cash into the borrowed name account newly opened in another name or the existing borrowed name account and purchased shares. After withdrawing the check with the high-amount check for a long time, the amount of the check kept without using the check as it is is is also the maximum amount.

In addition, in the event capital increase is implemented, the existing shares were sold in order to raise the price of new shares in that it is more favorable to acquire new shares at a lower price than to give up new shares due to the shortage of subscription funds, and most of them were held in 198 and 1999, and after January 2000, there was only a case where small amount of shares were sold to participate in the capital increase with new shares issued by Samsung Fire after 2000 after the year 200 (the public prosecution was instituted only for the shares sold after 200).

(3) Reporting system, etc.

Defendant 4, the head of the finance team, Defendant 8 or his successor, and Nonindicted 14, his successor, were delegated to Defendant 8 or Nonindicted 14. Defendant 3 was in the position of the overall conductor, Defendant 4, and Defendant 8, with respect to the personal property management.

Defendant 4 reported to Defendant Lee Jong-hee one time in ordinary two to three years on the overall property status including the instant borrowed account.

(c) Markets:

(1) The part concerning the evasion of capital gains tax on the shares acquired after January 1, 199 (ownership)

(A) Of the facts charged in violation of the Act on the Aggravated Punishment, etc. of Specific Crimes (tax) by each taxable year of 2000 to 2006, the part on conviction of Defendant Lee Jin-hee, Defendant 3, 4, and 8 on the stocks acquired after January 1, 199 as stated in the judgment of the court below and the part on exclusion of listed stocks by each taxable year of 199 as to the stocks acquired after January 1, 199.

According to the above facts, ① the deceased Nonindicted 11 and Nonindicted 14, who was in charge of the management of the personal property of Samsung Group, mainly opened and used a borrowed account in the name of the executives and employees of Samsung Group, ② distributed shares, cash, and bonds owned by the Defendant Lee Ho-hee using a large number of borrowed accounts exceeding 1,000, and ③ transferred property from a single borrowed account to another borrowed account only carried out the method of cash withdrawal, not check or account transfer, so as to make it impossible for the tax authorities to track the transfer of property from a single borrowed account.

Therefore, it is recognized that the tax official’s failure to report the transfer income even if the deceased Nonindicted 11 and Nonindicted 14 traded to acquire and sell shares in a large number of diversified account as seen above was impossible or considerably difficult to find that the shares in the above name account are all owned by the Defendant Nohn who is a major shareholder and is subject to the transfer income tax.

(B) Determination of the defense counsel's assertion

The Defendants and the defense counsel asserts that even if using the borrowed account, it is not “Fraud or other unlawful act” in light of the motive and background of the specific act. In other words, ① ownership of stocks in the name of the borrowed account for the purpose of defense of management rights was irrelevant to tax evasion in the motive and background leading up to holding the borrowed account, and ② transfer of stocks in the name of the borrowed account was only a case of changing the borrowed account to the account of the new nominal owner due to the retirement or death of the nominal owner, and there was no active act of concealing income in addition to the possession of the simple borrowed account, since there was no intention to raise income through the sale of stocks.

There is no evidence or objective circumstance to deem that there was an intent to conceal assets in the borrowed account to increase assets through frequent sale of affiliates, such as Samsung T&E, etc., and there is no room to consider the motive and background of such specific act, even though the evidence supporting the defense counsel was not sufficiently submitted. However, if the deceased Nonindicted 11 and 14 operate a large number of borrowed accounts, and there is a need to withdraw and consume money from a certain borrowed account or deposit money into a new account, it is difficult to track funds by using a method of cash withdrawal, etc. even if the amount is high, and if the received amount of dividends was withdrawn by check, it is difficult to track funds by the tax authority, such as deposit into the account of the same account holder or long-term storage without using it, and if the existing account holder does not use the borrowed account any more, all of the nominal shares of the nominal owner are sold to the account holder and the act of purchasing new shares in cash with the view of social norms or by purchasing new shares in the same way as the above 20th new account.

(C) Intentional intent of tax evasion

As long as Defendant Lee Jong-hee et al. had a tax liability for the transfer income tax and had the awareness and intent of concealing property by using a borrowed account, the intention of tax evasion is not denied solely on the ground that the motive for holding a borrowed account was for the purpose of maintaining the management right by avoiding the regulation of ownership shares.

(D) The portion of transfer income tax on stocks acquired between January 1, 1999 and December 31, 1999

Before the enforcement of the Enforcement Decree of the Income Tax Act amended by Presidential Decree No. 16664 of Dec. 31, 1999, the defense counsel asserts that there is no criminal intent to evade tax for the portion of KRW 13,079,223,470, total annual income tax due to the transfer of stocks acquired between January 1, 1999 and December 31, 199.

On the other hand, the listed stocks taxation provision of this case was newly established for the purpose of imposing capital gains tax on the stock transaction of major shareholders, and as long as it is evident that Defendant Dok is a major shareholder of an affiliate such as Samsung Electronic, etc., the Defendants could have predicted that the income tax liability would occur on the capital gains that sell the stocks owned by Defendant 1, as of January 1, 1999 when the regulation on the taxation of capital gains tax on listed stocks of this case was enforced on January 1, 199 (limited to the requirements for imposing capital gains tax, it is not necessary to specifically recognize the amount of tax to be determined after the transfer).

(e) Formation of co-principals

As seen earlier, in light of the status of Defendant Lee Jong-hee, Defendant 3, 4, and 8, the role in the management of personal property and the background leading up to the report on the management status, etc., it is recognized that Defendant 3, 4, and 8 had a co-principal relationship with Defendant Lee Jong-hee.

(f) Sub-decisions

Therefore, as stated in paragraph (1) of the crime committed in the judgment of the court below, the sum of the income tax of each taxable year on the gains from the transfer of the shares acquired after January 1, 1999 through the borrowed account is established as joint principal offenders of the crime of tax evasion of the above defendants.

(2) The portion of evasion of capital gains tax on the stocks acquired before December 31, 1998 (not guilty)

(A) Of the charges of violation of the Act on the Aggravated Punishment, etc. of Specific Crimes by Each taxable year of 2000 through 2006, the Defendants conspired to manage the shares acquired by the said Defendants prior to December 31, 1998 as a multiple securities consignment account opened by borrowing the name of the executives of Samsung Group’s affiliates, etc., and by fraud or other unlawful act as stated in paragraph (1) of the crime prior to the original judgment, the amount equivalent to KRW 65,649,063,467 in aggregate of each annual capital gains tax as stated in the judgment below’s non-guilty portion of “the list of capital gains tax evasion” attached to the judgment below (However, Defendant 8 evaded the portion equivalent to KRW 50,106,684,159 for the previous shares acquired on December 31, 1998.

(B) Article 38 of the Constitution provides that “All citizens shall have the duty to pay taxes under the conditions as prescribed by Act” and Article 59 provides that “types and rates of taxes shall be determined by Act” and declares the principle of no taxation without law. This also includes the principle of prohibiting legislation that is retroactively taxed in the past where there was no tax liability, and such principle of no retroactive taxation contributes to the guarantee of legal stability in tax legal relations and the protection of taxpayer’s trust. In particular, in the operation of criminal law, the principle of no taxation without law, which stipulates that the act and fact at the time of the enforcement of the law, are only subject to the application of the law, and that the act and fact completed before the enforcement of the law, in principle, are not applied

(C) If the use of a borrowed-name account intends to constitute fraud or other unlawful act, it should be positively intended to conceal the sales price deposited in the account at the time of selling the borrowed-name account through the borrowed-name account. As such, in principle, there should be an act of purchasing and entering shares in the borrowed-name account. However, as at the time of acquiring shares through the borrowed-name account before December 31, 1998, there was no provision on taxation of the transfer income tax of listed shares in the instant case at the time of acquiring shares before December 31, 1998, it was not entirely foreseeable about the liability to pay the transfer income tax due to the transfer of shares by the major shareholder, and after the enforcement of the said provision, it was only an act of holding the shares in the borrowed-name account and selling them after the enforcement of the said provision, it cannot be deemed as a fraud or other unlawful act

However, with respect to the shares acquired through a borrowed account on or before December 31, 1998, if there is an active concealment of the intention to evade tax newly after the enforcement of the regulation on taxation of transfer income tax of the listed stocks of this case, the possibility of falling under a fraudulent or other unlawful act is not entirely excluded. However, since the enforcement of the regulation on taxation of transfer income tax of the listed stocks of this case, the act of concealing the ownership relationship by suffering the shares in the borrowed account before December 31, 1998 was completed. Since the enforcement of the regulation on taxation of transfer income tax of the listed stocks of this case, the said act was only an act of receiving dividends, selling stocks, withdrawing cash, or closing the account with respect to the said shares, and it cannot be deemed as a tea that continued holding and managing the borrowed account made before the enforcement of the regulation on taxation of transfer income tax of the listed stocks of this case, such act alone does not constitute an active concealment (the same applies

(D) Determination of the special prosecutor’s assertion

Unlike this, the Special Prosecutor’s assertion that most continuously and repeatedly selling and purchasing the same shares for each account is for the purpose of increasing the market price marginal profit by purchasing and selling the shares at each time of the stock price fluctuation, which may be detrimental to the purport of asserting that there was an intention to evade tax, but there is no proof as to such factual relation (in light of the account details of the submission by the counsel, the stock price trends, the company’s publication data, etc., such circumstance appears to exist).

(e) Sub-committee

Therefore, with respect to the portion corresponding to the transfer income accruing from the transfer of stocks acquired through the borrowed account before December 31, 1998 among the charges of tax evasion by year, it is merely a mere non-declaration and cannot be deemed as tax evasion by fraud or other unlawful means.

Therefore, this part of the facts charged constitutes a case where there is no proof of crime.

(3) Judgment of acquittal

(A) Summary of the facts charged

The summary of the facts charged of violation of the Act on the Aggravated Punishment, etc. of Specific Crimes (tax) by each taxable year of 2000 and each taxable year of 2001 is that the above Defendants conspired in collusion to manage the shares owned by this case to a large number of securities consignment accounts opened in the name of the executives of Samsung Group affiliate, etc., and by means of fraud and other unlawful act as stated in paragraph (1) of the facts charged prior to the original judgment, as stated in the corresponding column of “the list of evasion of capital gains tax” in the attached Form of the judgment of the court below, each evaded capital gains tax of KRW 1,337,542,614, 200 as stated in the corresponding column of “the list of evasion of capital gains tax”.

(b) the sales board;

Of the above facts charged, the part of capital gains tax evasion on the shares acquired before December 31, 1998 is judged not guilty on the grounds as mentioned above. The remaining amount of capital gains tax evasion except for the non-guilty portion is KRW 170,764,291, and KRW 488,391,515, which reverts to the year 2001.

Therefore, Article 8(1) of the Act on the Aggravated Punishment, etc. of Specific Crimes does not apply to the aggravated provision of Article 8(1) of the Act on the Aggravated Punishment, etc. of Specific Crimes because the amount of evaded tax is less than KRW 500 million (the provisions of the former Act on the Aggravated Punishment, etc. of Specific Crimes (amended by Act No. 7767, Dec. 29, 2005). Therefore, Article 9(1)3 of the Punishment of Tax Evaders Act can only be discussed, which is five years in accordance with Article 17 of the same Act.

The crime of evading the transfer income tax of this case is established when the period for filing the final return of the transfer income tax base is imposed, and it is evident that the special prosecutor's prosecution was instituted on April 17, 2008 after five years from the expiration date of the final return period of the transfer income tax base for the year 200, May 31, 2001 and May 31, 2002, which is the expiration date of the final return period of the transfer income tax base.

Therefore, the charges of violation of the Act on the Aggravated Punishment, etc. of Specific Crimes (tax) committed on May 31, 2001 against Defendant Lee Jong-hee, Defendant 3, and Defendant 4 constituted the time the statute of limitations expires.

3. Judgment of the court below

A. As to the assertion of misunderstanding of facts, misunderstanding of facts, or misunderstanding of legal principles with respect to Defendant Lee Jin-hee, Defendant 3, 4, and 8 [including the part of evading capital gains tax on the shares acquired after January 1, 1999 (including the shares acquired from January 1, 1991 to December 31, 199)];

Article 9 of the Punishment of Tax Evaders Act and Article 8 of the Act on the Aggravated Punishment, etc. of Specific Crimes provides that "Fraud and other unlawful acts" in the crime of tax evasion shall be deemed unlawful by social norms as acts enabling the tax evasion, i.e., acts which are deemed unlawful by means of deception or other affirmative acts to the extent that the imposition and collection of taxes is impossible or considerably difficult (see, e.g., Supreme Court Decisions 98Do667, Apr. 9, 199; 2006Do5041, Aug. 23, 2007). Furthermore, the crime of tax evasion is not committed with intent to avoid or evade taxes, and thus, it does not require that the defendant should be liable for tax payment, and if one's act (e.g., fraud and omission) knows that it constitutes fraud or other unlawful acts, and if one commits an unlawful act or attempts to commit a tax evasion while recognizing the fact that the result of tax evasion occurred due to such act, it shall be deemed that the crime of tax evasion is committed.

Examining the evidence of this case closely in light of the above legal principles, the fact-finding and judgment of the court below on this point are justified, and there is no error of law by misunderstanding the facts or misunderstanding the legal principles. Thus, this part of the allegation of this case by the defendant No. 1, 3, 4, and 8 is without merit.

B. Regarding the special prosecutor's misconception of facts, misunderstanding of legal principles, contradiction in reasoning, and assertion of lack of reason (the part concerning the evasion of capital gains tax and acquittal of stocks acquired before December 31, 1998)

“Fraud or other unlawful act” under Article 9(1) of the Punishment of Tax Evaders Act refers to a deceptive scheme or other active act that makes it impossible or considerably difficult to impose and collect taxes, and it does not constitute a mere failure to report under tax law or making a false report without accompanying any other act (see Supreme Court Decision 2001Do3797, Feb. 14, 2003, etc.).

In light of the above legal principles, the following circumstances acknowledged by the court below and the court below's legitimate reasoning, i.e., regulation or sanctions on various administrative laws and regulations, tax imposition through investigation into the source of funds by tax authorities, and other social criticism, etc., although the chairman of the Lee Jin-hee used the borrowed-name account, although he was inherited on Nov. 1, 1987 and evaded inheritance tax, such circumstances cannot be viewed as an element affecting the judgment of fraud and unlawful act. ② The court below did not real name despite the implementation of the borrowed-name financial system on December 193, 1993, and maintained the borrowed-name account even if he had the opportunity to real name on several occasions such as 198 and 202. Thus, the court below's determination on this portion of the transfer income cannot be seen as an unlawful act of misunderstanding the legal principles, and thus, it cannot be seen as having been justified prior to the acquisition of stocks by misunderstanding the legal principles.

In addition, the special prosecutor’s judgment that “the act of acquiring the borrowed stocks before December 31, 198 constitutes an unlawful act of acquisition of the borrowed stocks” or “the act of acquisition of the borrowed stocks at the time of acquisition of the borrowed stocks constitutes an unlawful act of acquisition of the borrowed stocks,” and that “the act of acquisition of the borrowed stocks at the time of acquisition of the borrowed stocks constitutes an unlawful act of acquisition of the borrowed stocks at the time of acquisition of the borrowed stocks.” The court below determined that the act of acquisition of the borrowed stocks at the time of acquisition of the borrowed stocks is not an unlawful act of acquisition of the borrowed stocks at the time of acquisition of the borrowed stocks, but an intentional act of acquisition of the borrowed stocks at the time of acquisition of the borrowed stocks and other unlawful acts of acquisition of the borrowed stocks at the time of acquisition of the borrowed stocks.” The court below did not err by misapprehending the legal principles as to “the act of acquisition of the borrowed stocks at the time of acquisition of the borrowed stocks at the time of acquisition of the borrowed stocks,” but did not constitute an intentional act of acquisition of the borrowed stocks after the transfer of the borrowed stocks.

Therefore, this part of the special prosecutor's argument is without merit.

VI. Determination on the grounds for appeal of unfair sentencing by Defendant No. 1, Defendant 3, 4, and 8 and the grounds for appeal of unfair sentencing by the special prosecutor against the same Defendants as the special prosecutor

1. As to the Defendant’s assertion of unfair sentencing and the assertion of unfair sentencing against the Defendant, such as the special prosecutor

The crime of tax evasion of this case is an infringement of the right to taxation of the State by unlawful means, such as using the borrowed-name bank account, and thus, the possibility of criticism for the crime itself is high, and the defendant guilty is 46,561,789,08 won, and it is also important as a result of criminal act that has been committed for six years, but it does not begin with the purpose of gaining gains from market price while evading transfer income tax. The defendant's attempt to maintain the share ownership ratio of the defendant's 1970s to acquire new shares from the time of 00's old 190's old 20's old 19's old 20's old 2nd 19's old 2nd 19's old 2nd 19's old 2nd 19's old 2nd 2nd 9's old 2nd 6th 2nd 200's old 2nd 9's old 2nd 9's old 2nd 9's old 2nd 3.

2. As to Defendant 3, 4, and 8’s assertion of unfair sentencing and the assertion of unfair sentencing on the same Defendants by the special prosecutor

Considering that the crime of tax evasion of this case was committed by the Defendants using their own name and illegal means such as using the following accounts, and thus, it is highly likely that the Defendants were aware of the high possibility of criticism for the crime itself, and that the amount of tax evasion, which was found guilty, is equal to KRW 46,561,78 (Provided, That in the case of Defendant 8, 60,86), and that the period of tax evasion was also significant as well as that of KRW 6 years (3 years in the case of Defendant 8), and that the Defendant 3 took a role of direction and supervision over the private property evasion of the Defendant 1400,000,000,000,000,000,000,0000,000,000,000,000,000,000,000,000,000,000,00) were more than 10,000.

VII. Conclusion

Therefore, the judgment of the court below on the acquittal of the Samsung 2 Co., Ltd. for the defendant 1, 3, 4, 6, and 7 on the violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Misappropriation of trust) is reversed ex officio as seen above, and the conviction of the defendant 3, 4, and 8 cannot be maintained any more on the grounds that each of the above parts of the judgment of the court below cannot be affirmed pursuant to Article 364 (2) and (6) of the Criminal Procedure Act (the judgment of the court below on the violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Articles 3, 4, 6, and 7 of the judgment on the Aggravated Punishment, etc. of the Aggravated Punishment, etc. of the Aggravated Punishment, etc. of the Aggravated Punishment, etc. of the Aggravated Punishment, etc. of the Aggravated Punishment, etc. of the Aggravated Punishment, etc. of the Aggravated Punishment of the Aggravated Punishment, etc. of the Aggravated Punishment, 2003 to 3,4 and 8.

Since each of the facts constituting the crimes against Defendant 3, 4, and 8 recognized by this court and the summary of the evidence related thereto are the same as that of the judgment below, they are cited in accordance with Article 369 of the Criminal Procedure Act.

1. Relevant legal principles concerning facts constituting the crime;

Article 8 (1) 1 of the Act on the Aggravated Punishment, etc. of Specific Crimes, Article 9 (1) 3 of the Punishment of Tax Evaders Act, and Article 30 of the Criminal Act

1. Selection of punishment and the concurrent imposition of a fine;

Each limited term of punishment shall be selected, and the punishment of fines shall be concurrently imposed pursuant to Article 8 (2) of the Act on the Aggravated Punishment, etc.

1. Handling concurrent crimes (Defendant 3);

The latter part of Articles 37 and 39(1) of the Criminal Act [mutual crimes of violation of the Act on the Aggravated Punishment, etc. of Specific Crimes of May 31, 2003 and the Act on the Aggravated Punishment, etc. of Specific Crimes of May 31, 2004 and violation of the Political Funds of which judgment has become final and conclusive]

1. Aggravation of concurrent crimes;

A. Defendant 4 and Defendant 8: The former part of Article 37, Article 38(1)2, and Article 50 of the Criminal Act [the punishment of concurrent crimes shall be aggravated to imprisonment with prison labor as provided for in the Act on the Aggravated Punishment, etc. of Specific Crimes, which is the largest crime on May 31, 2007, and the punishment of a fine which is essential for the crime of violation of the Act on the Aggravated Punishment, etc. of Specific Crimes (tax) shall be excluded from the application of Article 38(1)2 of the Criminal Act on the Aggravated Punishment, etc. of Specific Crimes under the main sentence of Article 4(1) of the Punishment of Tax Evaders Act, so it shall be separately prescribed by a fine for each year (see Supreme Court Decision 94Do952, May 31, 1996)]

B. Defendant 3: the former part of Article 37, Article 38(1)2, and Article 50 of the Criminal Act

- Among the crimes of violation (tax) of the Act on the Aggravated Punishment, etc. of Specific Crimes (tax) dated May 31, 2003 and May 31, 2004 - The punishment of concurrent crimes shall be aggravated by imprisonment with prison labor as determined by the Act on the Aggravated Punishment, etc. of Specific Crimes (tax) committed on May 31, 2004 with the heavier penalty, and the punishment of fine shall be the same as “A.”

- Among the crimes of violation of the Act on the Aggravated Punishment, etc. of Specific Crimes (tax) dated May 31, 2005, May 31, 2006, and May 31, 2007, the crime of violation of the Act on the Aggravated Punishment, etc. of Specific Crimes (tax) shall be aggravated for concurrent crimes with imprisonment as provided for in the crime of violation of the Act on the Aggravated Punishment, etc. of Specific Crimes (tax) dated May 31, 2007, which is the largest sentence of the crime, and the punishment of fine shall be aggravated

1. Discretionary mitigation;

Articles 53, 55 (1) 3, and 6 of the Criminal Code. Article 53 of the Criminal Code (General Conditions in favor of the Decision on Reasons for Appeal Undue Practices)

1. Suspension of execution (the defendants);

Article 62(1) of each Criminal Code (General Considerations favorable to the Decision on Grounds for Appeal on Unjustifiable Reasons for Appeal)

1. Exemption from a fine (defendants);

The proviso to Article 3 of the Punishment of Tax Evaders Act (including favorable circumstances described in the part concerning the decision on the grounds of unfair appeal)

1. A community service order (defendants);

Article 62-2 of the Criminal Code

1. A violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Misappropriation) concerning the issuance of Samsung SDR bonds;

The summary of the facts charged regarding the violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Misappropriation) with respect to Defendant Lee Jong-hee, Defendant 3, 4, 6, and 7 is identical to the summary of the judgment of the grounds for appeal as to the grounds for appeal (Ⅳ. 1. The summary of this part of the facts charged), and this part of the facts charged constitutes a case where there is no proof of crime as seen in the "Ex officio Judgment of March, 199," and thus, it is sentenced not to

2. A case violating the Act on the Aggravated Punishment, etc. of Specific Crimes;

From May 31, 2003 to May 31, 2007 (Provided, That with respect to Defendant 8, May 31, 2005 to May 31, 2007) the part of judgment on the grounds for appeal that the above Defendants evaded capital gains tax on the non-guilty portion in the separate statement in the judgment of the court below since the above Defendants conspired to manage the stocks acquired before December 31, 1998 as a securities consignment account established by borrowing the name of executives of Samsung Group's affiliates, etc., and by fraud or other unlawful act, it constitutes a violation of the Act on the Aggravated Punishment, etc. of Specific Crimes (the judgment of the court below on the non-guilty portion of the non-guilty portion in the separate statement in the separate judgment of the court below 202 to 2006 (the judgment of the court below 5th day of May 31, 2005 to May 31, 2007).

Judge Clerks (Presiding Judge) Lee Jae-young