2017Gohap894 Violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Misappropriation)

2017 initially 3271 Application for a compensation order

A

Powers Nanawons (Courts) and Kim Tae-tae (Courts)

Law Firm LBP Partners, Attorneys Kim Jong-sung, and Hail

Law Firm Dongin Law LLC, Attorneys Yellow-gu, Kim Jin, and leapul

Law Firm LLC (LLC, Attorneys Kim Young-soo, two-wheeled, and Kim Down-ri

B A.

Law Firm Maman, Attorney Lee Jae-hwan

January 19, 2018

A defendant shall be punished by imprisonment for three years.

An applicant for compensation shall be dismissed.

Criminal History Office

From March 25, 2008 to March 22, 2013, the Defendant is the representative director of the Victim C Co., Ltd (former Co., Ltd.; hereinafter referred to as “victim Co., Ltd.”) with the purpose of entertainment entertainment business from March 25, 2008 to March 22, 201, and is the largest shareholder who owns 8.94% of the total number of issued and outstanding shares.

Around November 2008, the Defendant introduced E/F (hereinafter referred to as “transferee”) to take over the management rights of the victim company from D, which was the former representative director of the victim company, and transferred the management rights of the victim company to KRW 2,143,000 and KRW 9,000,000,000. The down payment amount of KRW 2 billion,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,00,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,00,00,00,00.

In such a case, the defendant, as a representative director and a manager of the victim company, has a duty to execute the company's funds through a reasonable evaluation of the actual user and the business performance and profitability, price or property value of collateral, business failure, possibility of recovering the principal and interest when conducting an auction on the security, etc. when investing or lending the company funds to a new business that is not related to the original business purpose of the victim company as a manager.

Nevertheless, the Defendant did not examine the substance and progress of H projects promoted by the above E and G, the business performance and profitability, the actual use place of the leased funds, the status and rights of H projects as to H projects, and the above E and G status and rights. On the land and above ground buildings in Jung-gu Seoul Special Metropolitan City (hereinafter “I-owned real estate”), which are owned by the Defendant as collateral, the lower court, prior to the establishment of a collateral security right equivalent to KRW 6.81 billion in total amount of the maximum debt amount, was extremely unlikely to recover the principal and interest at the time of changing the market price of the real estate or conducting auction, without any adequate evaluation of the secured real estate.

Accordingly, the Defendant violated his duties and entered into a loan agreement with E on November 14, 2008, including KRW 1.2 billion around November 20, 2008, and KRW 800 million around November 20, 2008, with a resolution of the board of directors of the victim company to lend KRW 2 billion to E and G, respectively. Around November 21, 2008, the Defendant loaned KRW 2 billion to E (title G) at an annual interest rate of KRW 9% on February 21, 2009 on the date of repayment, and additionally lent KRW 60 million to E (title G) at an annual interest rate of KRW 9% on a redemption date, KRW 60 million on a reimbursement date, and KRW 2.4 billion on a cashier’s checks prepared in advance for ownership real estate.

As a result, the defendant violated his duties, thereby having the above E gain a total amount of KRW 2 billion from property interest of KRW 60 million, and suffered property damage equivalent to the same amount in the victim company.

Summary of Evidence

1. Partial statement of the defendant;

1. Each legal statement of witness I, K and G;

1. Partial statement of each prosecutor's protocol of examination of the defendant against the defendant;

1. The prosecutor's statement concerning G;

1. Each police officer's statement about L, G, I, and F;

1. Application of Acts and subordinate statutes to each loan agreement, each cash acceptance certificate, each full certificate of registered matters, each report on major management matters, each report on stocks owned by major stockholders, results of a special general meeting of shareholders, copies of cashier's checks, copies of mortgage-backed security agreement, copies of authentic deeds, copies of authentic deeds, copies of each document, copies of each document of purchase and sale of stocks, each transcript of each record, each agreement on acquisition of stocks and management rights, each annex agreement, minutes of each board of directors' meeting, individually assessed land price, appraisal statement, written confirmation

1. Article relevant to the facts constituting an offense and the selection of punishment;

Article 3 (1) 2 of the former Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Amended by Act No. 11304, Feb. 10, 2012); Article 356 and Article 355 (2) of the Criminal Act [In general, choice of imprisonment and choice of imprisonment, however, the upper limit of imprisonment shall be governed by the main sentence of Article 42 of the former Criminal Act (Amended by Act No. 10259, Apr. 15, 2010)]

1. Dismissal of application for compensation;

Article 32(1)2 and 3, and Article 25(3)3 of the Act on Special Cases concerning the Promotion, etc. of Legal Proceedings (the existence or scope of the defendant's liability to compensate for damage is unclear and it is not reasonable to issue an order for compensation)

Judgment on the argument of the defendant and his defense counsel

1. Summary of the assertion

A. On October 2008, the Defendant received a request from D to transfer a victim company again, and around November 2008, E, which was introduced by D as a transferee of management rights, requires money in M business investment. However, the Defendant expressed that the Defendant may execute corporate funds in the form of loan, not in investment, on condition that part of an intermediate payment for acquiring management rights is paid.

B. On November 25, 2008, E paid the remaining intermediate payment of KRW 2 billion, and entered into a contract for acquisition of shares and management rights in a regular manner. The Defendant, under the contract, was obligated to cooperate in the management activities of E, which the transferor intended to promote M business, and the Defendant was obligated to transfer the duty to cooperate in the management activities of E, and immediately after the appointment of F as the management manager, the victim’s fund of KRW 2 billion was executed to G with the approval of E, and KRW 60 million was executed to E, respectively.

C. The Defendant had been aware that, as a matter of course, the part payment paid by E and D on November 25, 2008, the part payment of KRW 2 billion was 2 billion, and the victim’s funds executed by the loan were naturally used for M business.

D. The Defendant did not lend an intermediate payment of KRW 2 billion to G promoting M business, but rather was prepared with a loan agreement, and made every effort to prevent damage to the victim company by securing personal security, such as physical security for I-owned real estate, E, F, confirmation documents, G, and promissory notes against I. Even if the Defendant’s judgment was negligent, even if the acquisition company was unable to recover the funds due to the acquisition of the contract and the failure of M business, the Defendant cannot be held liable for the crime of breach of trust unless the Defendant had an intention to commit a breach of trust against the company.

2. Determination

(a) Facts of recognition;

According to the above adopted evidence, the following facts are recognized.

1) On January 25, 2008, the Defendant acquired the management right of the victim company from D to pay the remainder after subtracting the acquisition amount of KRW 2 billion from the acquisition amount to KRW 9 billion, which led to the management of the victim company as the representative director. D, around 2008 and October 10, the Defendant provided that the Defendant would accept the victim company again, and the Defendant would accept the victim company. E, which became aware of the victim company through D, requested K to assist in raising funds by being introduced from the branch around October 2008 to take over the victim company, and K introduced the G, which was promoting the participation in the M business among H businesses.

2) Around November 3, 2008, the Defendant introduced E from D and continued to discuss the acquisition of shares and management rights in the victim company. On November 7, 2008, the Defendant prepared a contract for acquisition of shares and management rights in which E was an employee of E as transferee and the guarantor as D, and was paid an intermediate payment of KRW 3 billion from the transferee on November 14, 2008. At that time, E requested the Defendant to the effect that “A intends to make an investment in H business with “G”, and that “a loan of KRW 2 billion in the funds of the victim company is lent.”

3) On November 14, 2008, when E and F paid intermediate payments of KRW 3 billion, the Defendant made a resolution by the board of directors on a loan of KRW 1.2 billion out of the funds of the victim company. However, the transferee’s side failed to prepare intermediate payments, which led to delay of November 21, 2008, after the date of the conclusion of the transfer contract, and the Defendant made a resolution by the board of directors on November 20, 2008 as well.

4) Around that time, “E” refers to the need for real estate offered as security to “K,” “K requested “K to introduce a real estate owner who is to use as security for the preparation of intermediate payment for acceptance,” and “K and “G” upon the introduction of G. The transferee of “E” requested “E” and “E” to provide funds after paying only one billion won out of intermediate payment on November 21, 2008, which is set out as the contract date. However, the Defendant and the transferee agreed to pay the price, and the transferee changed from “F” to “E.”

5) On November 21, 2008, the Defendant loaned KRW 2,00,000 to G with a view to lending KRW 60,000 to E (Evidence records 12, 37 pages). On November 21, 2008, the victim company established the right to collateral security of KRW 2,40,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,00,000,000 to E (Evidence records 12, 36,000,000,000,000,000).

6) Around November 25, 2008, E paid KRW 2 billion to the Defendant as part of part of part of part payment for acquiring shares and management rights at the representative director’s office of the victim company. Around November 25, 2008, the Defendant issued to E an amount equivalent to KRW 2 billion, which was deposited in advance from the corporate account of the victim company as a check, to E. The Defendant received a cash acceptance certificate of KRW 60 million from E as of November 25, 2008 (Evidence records, KRW 14,38), and the Defendant and E again signed and sealed the share and management right acquisition agreement (Records 337) on November 25, 2008, and the Defendant transferred the transferee’s right to account, such as head of the Tong, employee of the victim company, seal, etc. according to the terms and conditions of the contract.

7) Around December 2, 2008, the victim company entered into a contract with Q, etc. to acquire approximately KRW 1.1 billion in total the shares of the H company (R Co., Ltd.) related to the H business (Evidence No. 190 pages 190,000, and E and F borrowed KRW 500,000 from T as a joint guarantor by taking the status of transferee under the contract for acquisition of shares and management rights as collateral on December 8, 2008 (Evidence No. 366, page 366). The Defendant sent notice of the acquisition of shares and management rights and cancellation of pledge on the ground that the payment was not made to E on December 24, 2008, and the Defendant did not make a public announcement of the purport thereof on December 29, 2008. Around February 25, 2009, the amount invested at the general meeting of shareholders agreed to have succeeded to the status of D up to 300,000 won.

8) On February 2009, an application for voluntary auction was filed on or around February 2, 2009 for one real estate. The above real estate was appraised at approximately KRW 5.8 billion (5,891,973,300) in the auction procedure around March 2009. Around July 2009, approximately KRW 5.9 billion was reflected on the date of the first sale at the minimum sale price, and around about KRW 4.7 billion was awarded on or around October 2008 at the minimum sale price, KRW 6.32,50,000 from the date of the second sale at the highest sale price. The victim company failed to receive dividends from the above real estate, and even after the successful bid price falls short of the amount of claims of the senior mortgagee, the victim company was not aware of fraud, and around September 2009, G brought a complaint against the victim and the witness company’s new embezzlement and embezzlement on or around September 20, 2009.

B. Specific determination

Based on the above facts, in full view of the following circumstances revealed from the evidence adopted and examined by this court, it is reasonable to view that the Defendant violated the duty to protect the property of the victim company at the time of spending the company fund of KRW 2 billion as a loan to E and G, thereby causing property damage or damage to the victim company. The Defendant and the defense counsel’s assertion to the different purport is rejected.

1) At the time of acquiring the right of management of a victim company, D, the transferor, transferred the right of management of the victim company to the defendant due to lack of agreement to use the funds in embezzlement case for the victim company, and E, as a result of D introduction, intended to acquire the right of management from the defendant, provided that D, at the time of acquiring the right of management from the defendant, would take over the obligation of the transfer price which was not paid by the defendant, and the remaining intermediate payment amount of KRW 1 billion is not provided for the defendant, with the payment of KRW 1 billion among the intermediate payment of KRW 3 billion to E. The defendant himself, in this court, provided that "E would temporarily receive KRW 60 million, while lending the funds to E and temporarily receive KRW 60,000,000,000,000,000 won, and the funds were not sufficient for the transferee to obtain the right of management to obtain KRW 9,000,000,000,000,000.

2) The payment of intermediate payment of KRW 2 billion to the Defendant and the payment of KRW 2 billion to E was deferred several times on November 25, 2008. K, G, and I stated that the payment of KRW 2 billion funds of the Victim Company is related to the intermediate payment in the acquisition of management rights in this court. ① In particular, K, in this court, borrowed KRW 2 billion from the bondholder to the Defendant as part payment in the contract, and borrowed KRW 2 billion as stated in the facts charged by the Victim Company, and issued KRW 2 billion to the bondholder at the time of the Plaintiff Company’s request. The Defendant provided testimony that the Defendant acquired the shares and the intermediate payment of KRW 2 billion to the Company by acquiring the shares and the intermediate payment of KRW 2 billion. In light of the foregoing, K provided testimony that the Defendant and the intermediary payment of KRW 2 billion in the acquisition of the shares were also necessary by acquiring the shares of the Victim Company as part payment of the shares and the outstanding payment of the management rights to the Company.

3) There is no clear material to regard that the corporate funds paid at the time were used for H business. Rather, G, a holder of a loan, who promoted H business, did not receive KRW 2 billion from the loan on November 25, 2008, and testified to the effect that the Defendant first appeared on November 25, 2008, and that the Defendant gave an explanation about H business was thereafter thereafter (see, e.g., the witness G record page Nos. 8, 9, 29), and there is a question whether the Defendant’s interest was in the principal investment in H business at the time of disbursement of KRW 2 billion of the corporate funds. Comprehensively taking account of the above facts and circumstances, this case’s lending of the company funds constitutes an execution of funds with a personal motive to obtain the Defendant’s stocks and management rights over the transferee, not a pure execution of funds necessary for the management of the victim company. In such case, the Defendant need to collect loans more closely, but the measures taken by the Defendant below were insufficient as follows.

4) First of all, the right to collateral security against the real estate owned by the Defendant at the time of lending company funds to E was not a security to secure the recovery of the company’s loan claims. Around August 2008, when the price of the real estate was anticipated or was under progress after the U.S. financial crisis, which was established around August 2008, the right to collateral security had been established, and in fact, the value of the collateral security was considerably limited because the prior collateral security was established in an amount equivalent to 6.8 billion won in total. The appraised value of the real estate held around March 2009 in the auction procedure (U) for the real estate was approximately KRW 5.8 billion, and the final successful bid price was approximately KRW 6.3 billion in total, even if the appraised value and the successful bid price were to be less than the market price, it is difficult to say that the remaining value of the real estate at the time of establishing the right to collateral security was sufficient to secure the victim’s loan claims.

As such, it is difficult for the victim company to expect future recovery of claims through the above physical collateral at the time of lending. Therefore, it is difficult to evaluate the above act of creating collateral as taking adequate loss protection measures for the victim company in relation to lending KRW 2 billion to the company fund.

5) In addition, the Defendant received a promissory note notarial deed in the name of G, I, etc., and received a confirmation on the lending and repayment of company funds from E, F, G, and I, but the Defendant thereafter did not collect claims from E, G, and I as the representative director of the victim company, and the victim company failed to recover KRW 200 million. The Defendant voluntarily stated in this court that he did not know about the financial resources of E, F, G, and I, and there is no circumstance to deem that the Defendant was faithfully reviewed the financial resources at the time of the lending. Considering these circumstances, it is difficult to view that the possibility of substantial recovery of claims has been secured by the victim company through personal security at the time of the instant lending. Meanwhile, even though some of the shares of the victim company subject to the transfer agreement was protected until February 26, 2009, this is only a way that the Defendant could block the transfer of the management rights of the victim company in the event of failure of the transferee’s contract, and is an appropriate distance from the means of collection of the company funds.

6) Most of all, the Defendant, as the representative director of the victim company, should have been careful and more careful in the enforcement of the company’s funds to external third parties as the representative director of the victim company. However, prior to the payment of the company’s funds, the Defendant decided to execute the company’s funds on the part of the transferee, and actually paid KRW 2 billion to the transferee. Prior to the payment of the company funds, the transferee E, a transferee, paid the amount of KRW 9 billion out of the acquisition price, such as the management right, was a part of the intermediate payment, which is KRW 1 billion (in the form of the actual payment and the acquisition of the company’s debts, the amount of KRW 2 billion was replaced by the intermediate payment, and the amount of KRW 2 billion was executed by the company funds.) Even if the Defendant delayed the payment of the company funds due to delay by the transferee, the transferee’s acquisition ability and the possibility of repayment of the company loans to the victim as above.

In a situation where considerable risk exists, it is difficult to view that the execution of company funds as stated in the facts charged was a measure consistent with the duties for preserving the property of the victim company.

7) Even though there was an entity of H business that G attempted to promote, and the Defendant was anticipated to have a considerable feasibility in the event of running the said business with the acquisition of the victim company E, etc., at the time of lending the funds of the victim company, the Defendant was in the position of representative director at the time of lending the funds of the victim company, and in the situation where the acquisition of the right of management was not completed, it cannot be deemed that there was an essential change in the duty of property preservation

8) On November 28, 2008, the Defendant heard from G that “F would cancel the establishment of a right to collateral security upon appointment of E and F as a management supervisor.” This is obviously illegal act. However, inasmuch as it is difficult to view that the remaining value of the above real estate was sufficient from the time of the establishment of a right to collateral security, it is difficult to view that the above notification alone has changed from the point of view that the Defendant’s measure on lending of company funds was inappropriate to collect claims. Moreover, the Defendant’s attempt to prevent the Defendant from withdrawing until the termination of the time when the Defendant was short of collateral security. Moreover, the Defendant’s dialogue with E and S around November 28, 2008, and around December 28, 2008, notified that the acquisition of the right to collateral security may be paid to the remainder (Evidence No. 186 pages). However, the Defendant’s conversation with E and S in this case’s telephone recording (Evidence No. 2971) is not interfered with this case’s conversation. 251).

9) Ultimately, as a representative director, the Defendant, who was in charge of the overall management of the fund execution of the victim company and was in charge of the occupational duties to protect the company’s property, appears to have tried to be exempted from legal liability by having only the form of protecting the company’s property as the representative director, with respect to the expenditure to the third party G or E, according to the aforementioned circumstances. It is difficult to recognize that the Defendant performed the duties to protect the company’s property.

1. Reasons for sentencing: Imprisonment with prison labor for not less than three years nor more than 15 years;

2. Scope of recommendations according to the sentencing criteria;

[Determination of Punishment] Embezzlement and Breach of Trust, and Type 3 (not less than KRW 500,00 but less than KRW 5 billion)

[Scope of Recommendation] Basic Area: Imprisonment of two years to five years

[Scope of the revised Recommendations] Imprisonment of three to five years

3. Determination of sentence: The crime of three years imprisonment is a case where the defendant, who is the manager of the Entertainment listed company, lends the company funds worth KRW 2 billion to the transferee who lacks management right acquisition funds, without a thorough examination as to the possibility of collecting the claim. The defendant, as the representative director, has left the company’s duty related to the execution of the company funds associated with the acquisition of the company’s property. Considering the details of the defendant’s crime and the loss of the company, it is difficult for the defendant to be exempted from punishment corresponding to his criminal liability.

However, as a result of the transferee's failure to raise funds to take over the management right at the time, there is a realistic aspect that the company's damage becomes extinct due to the failure to take over the management right from D around early 2008, and the defendant seems to have been making every effort to recover the management of the victim company in insolvency, such as the designation of management issues for about 8 years from the beginning of 2008 to the time of transfer of the management right from D around 2016, and the victim company, which is a victim, in legal and legal form, can be the victim company, unlike the victim company, the majority shareholder of the victim company does not take such measures even though he could find the loss of the company in the process of taking over the management right and reflect it in the acquisition price of the stocks and the acquisition price of the management right.

The presiding judge, the Kim Jong-dong

Judges Kim Gin-han

Judges Doi-ro