Defendant shall be punished by imprisonment for a year and six months and by a fine of 3,00,000 won.

When the defendant does not pay the above fine.

Punishment of the crime

The Defendant is the former representative director of D Co., Ltd. (hereinafter referred to as “D”) that is a KOSDAQ-listed corporation.

1. The Defendant, on November 19, 2005, kept in custody of KRW 1.9 billion in capital increase by offering capital increase through public offering around November 19, 2005.

Around November 1, 2005, the above D announced that it was conducted with capital increase by a third party’s allocation, but the E’s promise to participate in capital increase was denied risks of failure due to the wind.

However, in the case of KOSDAQ-listed corporations, if it fails to implement the contents of disclosure due to failure to pay subscription money after publicly announcing that subscription money was issued, there was a possibility that it would be punished for the fraudulent disclosure by the Financial Supervisory Service.

Therefore, on November 30, 2005, the Defendant, at the above D's office located in Guro-gu Seoul Metropolitan Government F, decided to participate in the above E's third party's allocation instead of the above E. However, the Defendant embezzled the above 1 billion won out of the victim D's capital in custody as above by arbitrarily using it as the price for capital increase through the third party allocation.

2. Where the total stocks held by a person himself/herself and his/her specially related persons are held in excess of 5/100 of the stocks, etc. of any KOSDAQ-listed corporation, any person shall report the current status of holding and changes to the Financial Supervisory Commission and the Korea Securities Futures Exchange within five days from the date, and shall not make a false report on important

Nevertheless, the defendant, at the office of the above D around December 7, 2005, acquired new shares by participating in the capital increase with the third party's allocation as stated in the above Paragraph (1) and arbitrarily used the above D's funds, but the Financial Supervisory Commission and the Korea Securities and Futures Exchange reported the status of possession of stocks, etc. to the Financial Supervisory Commission and the Korea Securities and Futures Exchange and made a report on the progress and source of the fund raising.