A defendant shall be punished by imprisonment for six months.

However, the execution of the above punishment shall be suspended for two years from the date this judgment becomes final and conclusive.

Punishment of the crime

The Defendant is an artist who works separately in the name of “D” and is a major shareholder in the name of “E” (hereinafter referred to as “E”).

Around July 2011, the Defendant, along with F, G, H, I, etc., took over from J E, a corporation listed in KOSDAQ, with F, G, H, and I, provided acquisition funds to F and G, and substantially manage the said company, and the Defendant provided its name, including the honorary value as an artist, and provided its major shareholders.

At the time of the acquisition of E with F, I, etc., the Defendant borrowed 4.5 billion won, among 8 billion won acquired funds, from K and name-free bond business operators operating the bond business in 4.5 billion won, and withdrawn 3 billion won around August 201, which was after the acquisition of the company, and paid to K as bond security money. On February 2012, 201, the Defendant performed so-called “non-capital M&A” by offering 1250,000 shares of E as collateral to a mutual non-negotiable securities company and borrowing 1.5 billion won.

On July 201, the Defendant was notified that E would sell 1250,000 shares of E, if it fails to maintain the collateral ratio from the said securities company, due to the following: (a) a special tax investigation conducted by the National Tax Service; (b) a committee imposing penalty points to the Financial Supervisory Service on August 201; (c) a management right dispute arising around August 201; (d) a seizure of E’s property on the grounds of non-payment of acquisition price; and (e) a refusal to renew the guarantee period of the Korea Credit Guarantee Fund around February 2012.

On May 5, 2012, the Defendant agreed to guarantee the principal of the purchase of shares in the E office located in Gangnam-gu Seoul Metropolitan Government, along with F, I, L, and decided to maintain the collateral ratio by accepting shares from each other.

However, as above, the Defendant et al. performed capital M&A, and was in the situation of being repaid bonds by embezzlement of the company's capital, and there was no property owned.