2016Gohap189 Violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Fraud)

A

Sheet, Kim Jong-malk (Public trial)

Law Firm B

Attorney C

Law Firm (UP) D

Attorney E, F

August 31, 2017

The defendant shall be innocent.

The summary of the judgment against the defendant shall be published.

1. Summary of the facts charged

On March 27, 2015, the Defendant entered into a contract for acquisition of shares and management rights (hereinafter referred to as “instant contract”) with the victim G to acquire 340,000 equity shares of HD Limited (hereinafter referred to as “H”) for the total amount of KRW 5 billion for acquisition price from the victim G, and agreed that the transferor will simultaneously perform the transfer documents of equity shares, the documents appointing the transferee as the representative director, the documents appointing the transferee as the former registration officer, the entire resignation documents of the former registration officer, and the transferee to the attorney-at-law for the acquisition price of KRW 5,000,000,000,0000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,00

However, the Defendant concluded the above acquisition agreement and did not intend to pay all the agreed acquisition price of KRW 5 billion even if the registration of the corporation was completed by transferring the documents concerning the transfer of H’s shares and the change of executive officers from the victim.

On March 31, 2015, the Defendant received from the victim who believed to be able to fully receive the acquisition price in accordance with the above acquisition agreement, a letter of resignation of representative director, corporate identification book, corporate identification card, and all documents necessary for the transfer of equity and the change of executive officers, and received H’s management right by completing the registration of the corporation, but paid 3 billion won out of 5 billion won of the acquisition price Esck to the attorney-at-law on April 1, 2015, and instead paid 2 billion won. The Defendant acquired the pecuniary profit of 3 billion won in total by not succeeding the personal debt of KIKO Savings Bank to the victim’s KIKO Savings Bank.

2. Summary of the defendant and his defense counsel

The Defendant did not deceiving the victim with the intention of not paying the purchase price, but pointed out that the risk of the occurrence of contingent liability is reduced by accurately ascertaining the scale of transactions without data and did not intend to commit fraud. The Defendant paid KRW 3 billion to the victim. Although the Defendant attempted to deposit the account under H’s name to deposit the account and to conduct a close inspection, the Defendant had the intent and ability to pay the acquisition price in full because the victim refused it and the contract was not completed.

3. Determination

A. Facts of recognition

According to the following facts, according to the Defendant’s legal statement, witness G, I, J, K, and L’s legal statement, each written statement of police officer in relation to G, written agreement on acquisition of stocks and management rights, written confirmation of balance of purchase price, H assets and liabilities, written summary of H’s management report (Evidence 1), X-cell file (Evidence 3), and H’s financial fact-finding report (Evidence 4).

1) Circumstances before and after the conclusion of the instant contract

① Around October 2014, in order to sell H, the victim G made a report on the actual asset and liabilities of H with respect to H (as of September 30, 2014) by requesting it to an accounting corporation. The report on the actual asset and liabilities submitted a report on the actual asset and liabilities of H (as of September 30, 2014). Although there was a fact that the company’s inventory assets are less than those recorded in the account book, there was no content on the distance of non-data (victim G was not reflected in the financial statement and testified that the content on non-data transaction was verbally explained

② Around March 2015, the Defendant, prior to entering into a contract, expressed a simple financial history of H through an accounting firm to verify the truth of the report on the actual assets and liabilities and the changes thereafter. In this process, the Defendant pointed out that the Defendant’s financial officer of H was less than the initial explanation of the sales and operating profits on the financial statement to the financial officer of H. In the process, I explained that the company’s value is more than KRW 1.5 billion, net income per books per year, and KRW 5-600,000,000,000,000,000,000 won is more than those stated in the financial statement through non-data transactions, and that there was an additional entry of the victim’s personal account book and one-year-free transaction with the victim’s personal account book. Accordingly, the account officer of N Accounting Firm arranged the accounting books as X

(3) As above, a financial history report prepared by an accounting firm that had engaged in a simplified financial practice around March 19, 2015, stating that “H has continuously caused data transactions for a long time, and the tax risk arising from such transactions cannot be predicted, and thus, efforts should be taken to reduce the tax risk. The amount of sales reported by the company in the fiscal year 2014 is KRW 8.2 billion, net income per books, and net income per books, which are KRW 10 billion, and net income per books separately managed by reflecting non-data transactions.” The foregoing difference stated that “The amount of such difference is managed as the personal account under the name of the representative director.”

④ However, there was no material to accurately ascertain the accurate amount of contingent obligations, such as accurate size of non-data transactions and additional collection of taxes that may arise in the future, other than those submitted by I. The L accountant reported this content to a simple financial officer and delivered it to the Defendant, and thereafter (not clear whether the time is before or after the conclusion of the instant contract) requested the Defendant to conduct a close inspection, but failed to conduct a close inspection by preventing the people who seem to have organized violence from entering the company (the witness L testimony).

2) Details of the instant contract

① On March 27, 2015, the Defendant assessed the contract amount to an amount of KRW 6 billion higher than the value of the company presumed based on the net profit on the actual account books, reflecting the sales and net profit arising from H’s non-data transactions claimed by H, and entered into the instant contract with the victim.

Article 3 of the contract of this case sets the acquisition price of five billion won and the payment method thereof.

The transferee shall succeed to the person designated by the transferee or transferee within 3 business days from the date of the contract, 5 billion won for the transferee, the transfer of equity shares, the documents appointing the transferee as the representative director, and the resignation documents of all the existing registration officers, respectively, to the attorney-at-law.

③ Article 5 of the instant contract provides that “All liabilities and liabilities incurred by a company due to a cause prior to the closing date of the business year 2014 shall be accurately reflected in the financial statements presented by the company, including contingent liabilities and uncertain liabilities, and that the company has not intentionally reported or omitted taxes (excluding the portion reflected in the H’s report on H’s actual assets and liabilities as of September 30, 2014).” Article 7 provides that “if any liabilities incurred by a company due to a cause prior to the closing date of the business year 2014 are additionally discovered after the formation of the contract, or any contingent liabilities or all taxes and public charges incurred by an act attributable to a cause prior to the date of the contract are additionally collected, the transferor shall be liable for the damages.” Articles 5 and 7 provides that “The period of liability of the transferor shall be limited to six months from the date of conclusion of the contract, and thereafter the transferor shall be exempted from the liability of the transferor.”

3) Reasons for the failure to pay the acquisition price

① Under the terms and conditions of the instant contract, the Defendant deposited the acquisition price of KRW 5 billion to 0,000,000, and on March 27, 2015, prior to paying the acquisition price to the victim, the Defendant received all documents necessary for the transfer of equity, such as a letter of resignation from the representative director, a corporate superintendent, a corporate identification card, etc. from the victim, and was appointed as H director and registered on March 31, 2015.

On April 1, 2015, the Defendant paid KRW 5 billion to the victim in accordance with the instant contract. On the one hand, at the victim’s intervals, K, the investor, demanded an additional precision to identify the exact size of the non-data transaction, and the victim did not accept the request, thereby withdrawing KRW 2 billion invested by himself/herself (K, prior to the date of payment for the transfer price, did not confirm the exact transaction or the detailed contents, and testified that H’s net income was uncertain, and that H’s net income was demanded for the precision.)

③ Around 2 billion won, K recovered, the Defendant paid 3 billion won out of the acquisition price to the victim, and requested a postponement of the payment of the remaining KRW 2 billion. After which the Defendant opened the H account following consultation with the victim, the Defendant deposited KRW 2 billion in the following day, and made up a written confirmation of the balance of the purchase price to the victim. On the following day, the Defendant opened the account in the name of H and deposited KRW 2 billion in the bank with the victim (the witness G testimony). The confirmation of the balance of the purchase price stated that “2 billion won shall be kept in the balance of the H purchase price, and the said amount shall be deposited in the H corporation account on April 2, 2015.”

④ On April 7, 2015, the victim sent a text message to J that “I would like to misunderstanding and misunderstanding, and I would like to see the thickness of the president.” From April 8, 2015 to April 2015, the victim tried to reach an agreement through the revision of the instant contract, and continued negotiations with Defendant, K, and J (Defendant G’s testimony).

B. Specific Determination

The conviction in a criminal trial ought to be based on evidence with probative value, which makes it possible for a judge to have the truth that the facts charged are true beyond a reasonable doubt. As such, in order to be found guilty of the facts charged of this case, it should be proven to the extent that there is no reasonable doubt that the defendant deceivings the victim to conclude the instant contract even though the defendant did not intend to pay the full amount of the acquisition price from the time of conclusion of the

However, in light of the following circumstances revealed by the facts as seen earlier, it is insufficient to recognize that the evidence submitted by the prosecutor alone was proven to the extent that the Defendant had no intent to pay the acquisition price in full from the time of concluding the contract as above, beyond reasonable doubt.

① In light of the fact that the Defendant, in accordance with the terms and conditions of the instant contract, made the full amount of KRW 5 billion acquired, completed a written confirmation of the balance of the purchase price to the victim even after K recovered KRW 2 billion, and opened an account under the actual H and deposited KRW 2 billion, it seems clear that the Defendant had the ability to pay the full amount of KRW 5 billion for the acquisition price.

2) The victim G stated in the police that “it was impossible for K to conduct a due diligence on April 1, 2015 to receive the acquisition price.” 2-3 days later, the Defendant made a statement that he would bring KRW 2 billion after 2-3 days, and the Defendant did not give money on the ground that he would give KRW 2 billion after 2-2 days thereafter. On April 7, 2015, the Defendant, K, and J stated that “The Defendant did not have any intention to reduce the remainder of KRW 2 billion from the beginning on the first place.” (The Investigation Record 91 pages).

The evidence that the Defendant told the victim on April 7, 2015 that “the victim did not have any way to reduce the remainder of KRW 2 billion from the beginning” is only the victim’s statement in the police. However, the victim sent the text message of the crime to the Defendant on the same day and continued negotiations with the Defendant until the end of April 2015. As such, it is difficult to believe the victim’s statement by the police that the Defendant committed the crime against those who did not have any mind to reduce a considerable portion of the contract amount from the beginning and followed negotiations are contrary to common sense.

③ 피해자 G은 검찰에서 "나중에 알고보니 피고인과 함께 온 J, K이 모두 한패거리로 K이 20억 원을 회수해 간 그날 일은 우발적으로 일어난 것이 아니고 현장에서 쇼를 해서 20억 원을 가로챈 것이다."라고 진술하였고(수사기록 360쪽), 그 후 이 법정에서는 "이 변호사가 에스크로된 50억 원을 놓고 가자 K이 20억 원은 자신이 투자한 것이라고 하며 실사를 해야겠다고 하여 한바탕 해프닝이 있었다. 피고인이 처음부터 양 수대금 50억 원을 모두 지급하거나 10억 원 채무를 승계할 마음이 없었다고 생각한다."라는 취지로 증언하였다.

그러나 피고인이 처음부터 양수대금을 전부 지급할 의사 없이 K과 짜고 자신의 돈을 가로챈 것이라는 피해자의 진술 부분은 피해자의 추측에 불과하고, "대금을 지급하는 자리에 가기 전에 피고인에게 피해자의 무자료거래와 관련된 정확한 자료를 확인하고 싶다고 말한 사실이 있다."는 증인 K의 증언과 당시 상황에 대한 녹취서(증거목록 순번 27)의 기재만으로 피고인이 피해자를 기망하기 위해 K과 사전에 모의한 것으로 보기에는 부족하다.

④ The fact that the Defendant entered into a contract with the victim with the knowledge of the existence of a transaction without authentic material, and that the Defendant transferred the registration of a juristic person and demanded an additional close inspection which is not stated in the contract, and dealt with the payment of KRW 2 billion for the transfer price.

However, according to Articles 5 and 7 of the instant contract, in the event of occurrence of contingent liabilities or various additional taxes arising in connection with non-data transactions that were not reflected in the report on actual assets and liabilities as of September 30, 2014, the victim is liable for damages. Since there was no data to ascertain the exact scale of the non-data transactions, the Defendant was in a situation where it was difficult for the Defendant to predict the accurate scale of contingent liabilities arising from non-data transactions. Since the Defendant generally identified the existence of non-data transactions through a simple financial history, considering the increase in net income of the company, the value of the company was higher than that of the book, and there was no data to assess the acquisition price by taking into account the extra-debt liabilities, etc. Accordingly, since the period of liability of the transferor due to contingent liabilities, various taxes, etc. was limited to 6 months from the date of concluding the instant contract, the transferee, who is an investor, should promptly grasp the accurate scale of the non-data transactions until the date of signing the contract, and there was no possibility that the Defendant could have acquired the above additional data for 2000 billion won.

4. Conclusion

The facts charged in this case constitute a case where there is no proof of facts constituting the crime, and thus, is acquitted pursuant to the latter part of Article 325 of the Criminal Procedure Act, and a summary of the judgment of the defendant is publicly announced pursuant to Article 5

The presiding judge, the highest judge;

Judges of the High Instance

Judges Kim Dong-dong