Do 2018 Do 16652 A. Violation of the Act on Punishment, etc. of Specific Crimes (tax)

(b) Violation of the Act on Punishment, etc. of Specific Economic Crimes (Embezzlement)

C. Violation of the Act on Punishment, etc. of Specific Economic Crimes (Misappropriation)

(name of a crime partially recognized for Defendant A, B, or C

Occupational Breach of Trust

(d) Occupational embezzlement;

(e) Dried trees;

(f) Offering a bribe;

1. (a) b. (c) d. A;

2. (c) d. B

3. (b) D

4. (a)(c) E;

5. (a) b. (c) d. C:

6.(c)F

7.(c) G;

8. C. H

9.(c) I

Appellant A, B,C and Prosecutor

Defense Counsel, Law Firm Limited Liability Law Firm (Defendant A)

Attorney Park Young-tae, Kim Jong-sung, Park Jong-sung, Park Jong-kak, Park Jong-kak, Park Jong-kak, Park Jong-kak

Won, Magyeong, Magman, Magman

Any attorney-at-law in charge (for the defendant A), who is a law firm

Attorney Kim Chang-hun, Lee Ho-hun, Kim Ho-chul, Kim Jin (Defendant B)

For purposes of

Law Firm ELK LAW Partners (for Defendant B)

Attorney Lee Jong-soo, Kim Jong-dae, Park Jong-dae, Park Jong-dae, Park Jong-dae

legal entity (with limited liability) continental Aju (Defendant D)

Attorney Kim Yong-ho, Kim Jong-ho, Lee Han-chul, and Kim Promotion

Attorney Temporary Extraordinary, Lee Dong-young, Lee Jong-chul, Lee Jong-chul, Lee Jin (Defendant E)

For purposes of

Law Firm (Limited), Kim & Lee LLC (for Defendant C),

Attorney Song Jong-chul, Cho Il-young, Kim Il-sung, Kim Il-il, Cho Il-so, Lee In-bok

Attorney Park Ma-sung (for defendant F)

Attorney Kim Yong-hoon (for defendant G)

Attorney Yang Chang-soo (for Defendant H)

Attorney Stabilization (For Defendant I)

Supreme Court Decision 2017Do12129 Decided December 7, 2017

Seoul High Court Decision 2018Do93, 2017No 3788 (Joint) decided October 5, 2018;

2018 Do 723 (Consolidation, Separation) Judgment

October 17, 2019

all appeals shall be dismissed.

The grounds of appeal (any entry of the grounds of appeal submitted after the lapse of the period for submitting a statement of grounds of appeal, including a supplementary statement of grounds of appeal, shall be determined within the scope that supplements the grounds of appeal).

1. As to the grounds of appeal by a public prosecutor

A. The Act on the Punishment, etc. of Specific Crimes by Defendants A, E, and C (hereinafter referred to as the "Act on the Aggravation of Specific Crimes").

(1) The determination of the issue of violation (tax)

The establishment of the obligation to pay gift tax should be based on the date of acquisition of the donated property. Whether there was a stock donation as a subject matter of gift tax under the tax law should be determined based on whether a person acquired stocks and actually acquired the status that is able to exercise the right as a shareholder by acquiring stocks (see Supreme Court Decision 2004Do817, Jun. 29, 2006).

On March 31, 2006, the lower court, based on the reasons as indicated in its ruling, held that Defendant E and C were liable to pay gift tax, and that the period of the return of gift tax base for three months thereafter passed since June 30, 2006, the public prosecution of this case was instituted after the lapse of ten years from June 30, 2006, and accordingly, sentenced Defendant E, E, and C to be acquitted all of the charges of violation of the Act on the Aggravation of Specific Crimes (tax).

Examining the reasoning of the original judgment in light of relevant legal principles and records, there is no error of misapprehending the legal principles on the interpretation of Article 23(2) of the Enforcement Decree of the Inheritance Tax and Gift Tax Act, the acquisition of donated property, and the time when the obligation to pay gift tax is established, on the judgment of the original court.

B. Determination as to Defendant A, B, E, C, and F’s violation of the Act on Specific Economic Crimes Punishment, Etc. (hereinafter “Specific Economic Crimes Act”) in relation to the lease of Jacks (Misappropriation)

For the reasons as indicated in the judgment of the court below, the judgment below is insufficient to recognize that Defendant A, B, and C had a functional control over L-related occupational breach of trust, and it is not sufficient to recognize Defendant E and F as a joint principal offender, and it is insufficient to recognize that Defendant A, B, and C were guilty only for the crime of occupational breach of trust against Defendant C (excluding the part concerning Defendant C’s occupational breach of trust with respect to Defendant C), and that only for the crime of occupational breach of trust against L, M, and N (hereinafter collectively referred to as “each of the instant leased companies”). The judgment of the court below acquitted Defendant E-and the non-guilty of the specific violation of law.

Examining the reasoning of the original judgment in light of the relevant legal principles and records, there is no error of misapprehending the legal principles on the calculation of damages on the property of breach of trust on duty, the recognition of a principal offender on the part of a joint principal offender, by violating the logical and empirical rules in the judgment of the original court.

C. Determination as to Defendant A, B, and D’s violation of the Act on Specific Economic Crimes (Embezzlements) and occupational embezzlement

For the following reasons, the lower court rendered a judgment that Defendant A, B, and D’s payment of benefits to Defendant D is not guilty (Embezzlement) of violation of the Act on Specific Economic Crimes (Embezzlement), Defendant B’s payment of benefits to Defendant E and 0, and both Defendant B’s violation of the Act on Specific Economic Crimes (Embezzlement) and the intention of occupational embezzlement.

① It is difficult to readily conclude that: (a) the relevant affiliate of P Group’s appointment as an executive officer of Defendant D and the payment of benefits is obviously an act that is unnecessary or unjustifiable; (b) the payment of benefits substantially deviates from a reasonable level; or (c) the payment of benefits constitutes occupational embezzlement on the ground that it is merely an act that has been made in the shape of external salary.

② It is difficult to view that Defendant B had a specific perception of the payment of benefits to Defendant E and 0 before April 201 with regard to the payment of benefits to Defendant E and 0, and even thereafter, it is difficult to deem that Defendant A had an intention to jointly process the crime of embezzlement, or that Defendant B had functional control over the act through essential contribution to the crime.

Examining the reasoning of the original judgment in light of the relevant legal principles and records, the lower court’s judgment did not err by exceeding the bounds of the due diligence due to violation of the logical and empirical rules, or by misapprehending the legal principles on the intent of embezzlement, illegal acquisition intent, and joint principal offenders. The Supreme Court’s precedent cited in the grounds of appeal differs from the instant case case, and thus, is not appropriate to be invoked in the instant case.

D. Determination as to Defendant A’s violation of the Act on Specific Economic Crimes (Misappropriation of Trust) relating to the sale of shares held by Defendant A’s affiliates of P Group

1) The time when the crime of breach of trust results in property damage in the crime of breach of trust, and the time when the damage was incurred to the property of the principal is the case where the damage was incurred to the property of the principal. Thus, in case where the company had another company purchase the shares of the other company at a higher price due to the violation of this duty, such as the representative director of the company, etc., the amount of damage inflicted on the company is equivalent to the difference between the market price and the purchase price of the shares.

In the case of trading non-listed stocks, if there is a normal example of transaction that reflects the objective exchange value of the non-listed stocks properly, the market price shall be assessed by considering the transaction price B as the market price. However, in the absence of such a case, considering the fact that the relevant laws and regulations that provide for such a method are applying different criteria according to the purpose of each enactment, it cannot be readily concluded that this method should be applied at all times (e.g., the method of evaluation under Article 54 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act). It should be determined reasonably by taking into account the situation of the relevant non-listed corporation and the parties to the transaction at the time of the transaction, the characteristics of the relevant business, etc. (see, e.g., Supreme Court Decision 2005Do856, Apr. 29, 2005).

2) For the following reasons, the lower court rendered a not-guilty verdict on all of Defendant A’s primary prosecuted facts and preliminary prosecution facts related to Defendant A’s violation of the Specific Economic Crimes Act (Misappropriation) relating to the sales of shares held by affiliated companies of the P Group.

1) It is difficult to view that Defendant A, when selling stocks of Q, R, S, T, and U (hereinafter referred to as “instant stocks”) to V, W, and X (hereinafter referred to as “purchase affiliate”) for non-listed stocks, there is a perception or intention that Defendant A would particularly sell stocks to a higher price than that of the purchase affiliate than that of the purchase affiliate, and would receive payments from the purchase affiliate or cause damage to the purchase affiliate.

② It is difficult to readily conclude that an appropriate purchase price of the instant shares was an amount according to the supplementary evaluation method under the Inheritance Tax and Gift Tax Act or a fair value according to the corporate accounting standard, and it cannot be deemed that the purchase of the instant shares did not result in liquidity shortage due to the purchase of the instant shares due to sufficient cash holding by the affiliate at the time of the purchase of the instant shares. Therefore, it cannot be deemed that the purchase of the instant shares caused property damage to the affiliate.

Examining the reasoning of the original judgment in light of the above legal doctrine and the record, there is no error of misapprehending the legal doctrine on the intentional act of breach of trust and the occurrence of property damage by violating the logical and empirical rules in the judgment of the original court, thereby deviating from the limit of free evaluation of evidence, or by misapprehending the legal doctrine on the occurrence of property damage.

E. Determination as to Defendant B and G’s violation of specific economic crimes (Misappropriation) due to inserting Defendant B and G’s Y ATM-related Z

For the same reasons as the judgment of the court below, the court below concluded that it was difficult to recognize that AA ("Y" collectively before and after the mutual change was made to Y "Y", and hereinafter "Y") entered into a contract for the supply of ATM on two occasions on January 30, 200 and October 25, 2010, while participating in the Z (hereinafter "Z"), participating in the joint development agreement of ATM and paying the price for goods to B, and that it was difficult to conclude that A's economic breach of trust was not a specific violation of the law.

Examining the reasoning of the original judgment in light of the relevant legal principles and records, there is no error of misapprehending the legal principles on the intention of breach of trust and the occurrence of damages by violating the logical and empirical rules without exhausting all necessary deliberations for the judgment of the original court.

F. Violation of the Specific Economic Crimes Act in relation to Defendant B, G, H, and I’s acquisition of Y shares and increase in capital for consideration (Misappropriation)

judgment on the point of issue

On November 12, 2012, the court below found that the act of taking over Yju from AD on November 12, 2012 and the act of taking over Yju from AC, AE, and T on December 21, 2012, and the act of accepting new shares issued on December 16, 2013, and July 29, 2015, it is difficult to view that the act of taking over Y's new shares issued on July 29, 2015 exceeds the discretionary scope of reasonable management judgment. Accordingly, the court below found Defendant B and H's violation of the Act on Specific Economic Crimes (Misappropriation) related to the acquisition of Y shares in Defendant B, G, H, and I as not guilty.

Examining the reasoning of the original judgment in light of the relevant legal principles and records, there is no error of misapprehending the legal principles on the intention of breach of trust and the occurrence of damages by violating the logical and empirical rules without exhausting all necessary deliberations for the judgment of the original court.

G. Determination as to Defendant C’s point of selling trees related to AF

For the same reasons as the decision of the court below, among the portion received directly by Defendant C from AF and the portion received through Defendant C H from AF among the portion received through Defendant C’s sales revenue related to AG sales revenue of Defendant C, it is insufficient to recognize that the portion received by Defendant C is the same as the amount written in this indictment, from January 2008 to December 2010, and from April 201 to April 2012, 201.

In light of the above, only the crime of taking property in breach of trust in large amount was found guilty, and the remaining part was found not guilty on the grounds of the judgment.

Examining the reasoning of the original judgment in light of the record, the lower court did not err by exceeding the limit of free evaluation of evidence or by exceeding the limit of free evaluation of evidence or by omitting judgment, in violation of the logical and empirical rules.

H. The lower judgment on the guilty portion against Defendant A, B, and C was appealed against the lower judgment. However, there is no statement in the petition of appeal or the reasoning of appeal as to the guilty portion against Defendant A, B, and C, and there is no statement in the grounds of appeal.

I. Determination on the charge of additional collection due to Defendant B’s offering of a third party bribe

For the following reasons, the lower court reversed the first instance judgment that sentenced Defendant B to a collection in accordance with the latter part of Article 134 of the Criminal Act against Defendant B and did not impose an additional collection on Defendant B. In other words, it cannot be deemed that the first instance judgment, which was returned by AI (hereinafter “AI”) to P Group affiliate companies, was proved that the amount of KRW 7 billion that was returned to P Group affiliate companies was the same as the amount remitted from the first P Group affiliate companies, and it cannot be deemed that the P Group affiliate companies received the return of KRW 7 billion and did not have actually reverted to the Defendant.

Examining the reasoning of the original judgment in light of the relevant legal principles and records, the lower court did not err by misapprehending the legal doctrine on the identity, etc. of money and valuables provided as a bribe, by violating the logical and empirical rules, as otherwise alleged in the grounds of appeal.

2. As to the grounds of appeal by Defendant A, B, and C

A. Determination as to the point of occupational breach of trust in relation to the lease of J stores by Defendant A, B, and C

For the same reasons as the judgment of the court below, the court below found that the act of leasing a film room to each lessee company of this case of this case of this case constitutes occupational breach of trust, and that the case of occupational breach of trust in relation to the lease of a shop by the defendant A, B, and C (excluding the portion of non-guilty reasoning) was guilty. Examining the reasoning of the judgment of the court below in light of the relevant legal principles and evidence duly adopted, the court below did not err by failing to exhaust all necessary deliberations, thereby exceeding the limit of the attention of free trial due to the violation of the law of logic and experience, or by exceeding the limit of the duty of free trial due to occupational breach of duty of breach of trust, by failing to perform occupational breach of duty of breach of trust, and by failing to exhaust all necessary deliberations, by misapprehending the legal principles as to the intention of breach of trust and property damage, common principal offense, awareness of illegality, or inconsistency with the reasoning of this judgment.

B. Violation of specific economic crimes law relating to Defendant A’s payment of wages to Defendant E and 0 (Embezzlement)

Determination as to the point of occupation and occupational embezzlement;

For the same reasons as the judgment of the court below, the court below found Defendant A guilty of the violation of the Act on Specific Economic Crimes (Embezzlement) related to the payment of wages to Defendant E and 0, and of occupational embezzlement. In light of evidence duly adopted the reasoning of the judgment of the court below, the judgment of the court below did not err by exceeding the limit of free evaluation of evidence due to violation of the logical and empirical rules, or by misapprehending the legal principles on the criminal intent of embezzlement.

C. Determination as to Defendant C’s point of possession of trees related to AF

Based on the reasoning stated in the judgment below, the court below found Defendant C’s delivery of KRW 350 million per month from July 2013 to May 2016 to KRW 100 million by Defendant C’s delivery of KRW 350 million per month, and found Defendant C’s Defendant C guilty of the fact (except for the portion of innocence) of the part of acquittal on the part of Defendant C’s KRW 300 million.

Examining the reasoning of the original judgment in light of the evidence duly adopted, there is no error of misapprehension of the legal doctrine on the re-amount of money in breach of trust by violating the logical and empirical rule in the judgment of the original court, thereby deviating from the limit of free judgment due to violation of the rule of law.

D. Determination as to Defendant C’s receipt of the AK account among the fact that Defendant C’s vegetative trees related to AJ is located

In the case of taking property in breach of trust where the nature of the consideration for an illegal solicitation and other acts are inseparably combined with this in a case concerning the money and valuables provided to a person who conducts the business of another person in the course of the crime of taking property in breach of trust, it shall be deemed that the entire amount thereof has an indivisible nature as the consideration for an illegal solicitation (see Supreme Court Decisions 2012Do535, May 24, 2012; 2015Do3080, Jul. 23, 2015).

For the same reasons as the judgment of the court below, the court below found that the amount of KRW 847,672,232 that Defendant C received from the AJ from the account in the name of AK from September 2014 to May 2016, which is a corporation controlled by Defendant C, as the result of the judgment of the court below, as the amount that Defendant C received from the AJ to the account in the name of AK, is the amount that Defendant C received from the AJ for an illegal solicitation, and determined as guilty of this part of the public prosecution, and collected the entire amount.

Examining the reasoning of the original judgment in light of the relevant legal principles and evidence duly adopted, there is no error of misapprehending the legal principles on the amount of trust received and the amount of collection collected in breach of trust by failing to exhaust all necessary deliberations for the judgment of the original court, thereby going against the logical and empirical rules, thereby deviating from the bounds of free evaluation due to the violation of the rule of logic and experience.

E. Judgment on Defendant A’s other grounds of appeal

1) Although Defendant A alleged that the instant public prosecution was instituted by abusing the right to institute a public prosecution, even if Defendant A had the ability to become aware of the elderly age, such circumstance alone does not seem to have significantly deviates from the discretionary power of the prosecution. As such, Defendant A may not accept the instant public prosecution. Even if the purport of this part of the allegation is to be unfair sentencing, according to Article 383 Subparag. 4 of the Criminal Procedure Act, an appeal for the penalty of death or imprisonment with or without prison labor for not less than 10 years is allowed only in the instant case where Defendant A was sentenced to death penalty or imprisonment with or without prison labor for not less than 10 years, and thus, Defendant A’s assertion to the effect that it was unfair because it was too unreasonable in the instant case where Defendant A was sentenced to a more minor sentence against Defendant A due to such reason, is not a legitimate ground for appeal.

2) Although Defendant A’s defense counsel argues that it is unlawful to proceed with the trial without suspending the procedure of the trial against Defendant A of this case by the court below, in light of the records, it is difficult to see that Defendant A was in the state of “not having the ability to discern things or make a decision,” as prescribed by Article 306(1) of the Criminal Procedure Act, since it is difficult to view that Defendant A was in the state of “not having the capacity to discern things or make a decision.” Thus, the above assertion cannot be accepted.

F. Determination on Defendant B’s delivery of a third party bribe

For the same reasons as the judgment of the court below, the former president (hereinafter referred to as the "former president") requested the above defendant to provide support, recognizing that the request for the support of this case against AI was a grant of the cost for performing duties related to the re-acquisition of AM duty free shop according to the implementation of the new patent plan, which is an important pending issue of P Group, at the private meeting with the defendant B, and decided that the above defendant and the former president of P Group Do supported the AI with KRW 7 billion when recognizing that the demand of the above defendant and the former president of P Group Do was a demand for the delivery of the above consideration. Accordingly, the judgment of the court of first instance, which convicted the defendant B of the charge of giving a bribe No. 3 of this part, was maintained, and rejected the appeal by the above defendant.

Examining the reasoning of the original judgment in light of the relevant legal principles and evidence duly adopted, the lower court did not err by misapprehending the legal doctrine on unlawful solicitation, recognition of compensation relationship, compatibility of the status of the victim of the crime of giving a bribe and the provider of the bribe, etc. by violating the logical and empirical rules without failing to exhaust all necessary deliberations, such as the allegation of the grounds of appeal.

The Supreme Court rulings cited as the grounds of appeal are different from the instant case, and therefore, they are not appropriate for the original use in the instant case.

3. Conclusion

All appeals shall be dismissed. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Kim Jae-hyung

Justices Min You-sook

Justices Lee In-bok and Lee Dong-won

Only the part of the case.