[1] Whether a gift tax liability should be established based on the time of acquisition of donated property (affirmative)

[2] Where the representative director, etc. of a company has caused the company to purchase shares of another company at a higher price due to the company's violation of his/her duty, the method of calculating the amount of property damage caused to the company / the method of assessing the market price

[3] In a case where the nature of money and valuables provided to a person who administers another person's business is indivisiblely combined with the nature of the money and valuables as consideration for illegal solicitation, whether such money and valuables have the nature of the consideration for illegal solicitation (affirmative)

[1] Article 8 of the Act on the Aggravated Punishment, etc. of Specific Crimes; Article 3 of the Punishment of Tax Evaders Act; Articles 31(1) and 68 of the Inheritance Tax and Gift Tax Act; Article 23 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act / [2] Articles 355(2) and 356 of the Criminal Act; Article 54 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act / [3] Article 357(1) and (3)

[1] Supreme Court Decision 2004Do817 Decided June 29, 2006 (Gong2006Ha, 1458) / [2/3] Supreme Court Decision 2018Do20655 Decided June 13, 2019 / [2] Supreme Court Decision 2005Do856 Decided April 29, 2005 (Gong2005Sang, 902), Supreme Court Decision 2013Do12155 Decided February 27, 2014 / [3] Supreme Court Decision 2012Do535 Decided May 24, 2012 (Gong2012Ha, 1178), Supreme Court Decision 2015Do3080 Decided July 23, 2015

Defendant 1 and eight others

Defendant 1, Defendant 2, Defendant 5, and Prosecutor

Law Firm LLC et al. and 18 others

(1) Supreme Court Decision 2017Do12129 Decided December 7, 2017

Seoul High Court Decision 2018No93, 2017No3788, 2018No723 decided October 5, 2018

1) 【Judgment remanded】

All appeals are dismissed.

The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).

1. As to the Prosecutor’s Grounds of Appeal

A. The judgment on the violation of the Act on the Aggravated Punishment, etc. of Specific Crimes (hereinafter “Aggravated Punishment of Specific Crimes Act”) by Defendant 1, Defendant 4, and Defendant 5

The establishment of a gift tax liability shall be based on the time of acquisition of donated property. Whether there was a stock donation as a subject of gift tax under the tax law should be determined by the determination of whether there was a stock donation by acquiring stocks and the acquisition of the status as a shareholder (see Supreme Court Decision 2004Do817, Jun. 29, 2006).

On March 31, 2006, the lower court, on the grounds indicated in its reasoning, acquitted all of Defendant 1, Defendant 4, and Defendant 5’s violation of the Specific Crimes Aggravated Punishment Act (tax) on the ground that: (a) on March 31, 2006, the liability to pay gift tax was established; (b) on June 30, 2006, when the deadline for filing the gift tax base for three months thereafter became due, the statute of limitations of 10 years has elapsed since June 30, 2006; and (c)

Examining the reasoning of the lower judgment in light of the relevant legal principles and records, the lower court did not err by misapprehending the legal doctrine regarding 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 at

B. The judgment on the violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (hereinafter "Special Economic Crimes Act") concerning the lease of ○○○○○○○○○○○ Store by Defendant 1, 2, 4, 5, and 6

For the reasons indicated in its reasoning, the court below found Defendant 1, Defendant 2, and Defendant 5 guilty only for the crime of occupational breach of trust against Defendant 1, Defendant 2, and Defendant 5 (excluding the part concerning Nonindicted Company 2 with respect to Defendant 5), and found Defendant 4 and Defendant 6 not guilty for the crime of occupational breach of trust (excluding the part regarding Nonindicted Company 2), and found Defendant 4 and Defendant 6 not guilty for the violation of the Specific Economic Crimes Act (excluding the part regarding the crime of occupational breach of trust against Defendant 5), and found Defendant 4 and Defendant 6 not guilty for the reason of the violation of the Specific Economic Crimes Act (Misappropriation).

Examining the reasoning of the lower judgment in light of the relevant legal principles and records, the lower court did not err in its judgment by exceeding the bounds of the principle of free evaluation of evidence against logical and empirical rules, or by misapprehending the legal doctrine on calculating the amount of damages incurred in relation to the crime of occupational

C. Determination as to Defendant 1, Defendant 2, and Defendant 3’s violation of the Specific Economic Crimes Act (Embezzlement) and occupational embezzlement

For the following reasons, the lower court acquitted Defendant 1, Defendant 2, and Defendant 3 on the charge of the violation of the Specific Economic Crimes Act (Embezzlement) in relation to the payment of benefits to Defendant 3, Defendant 2’s payment of benefits, Defendant 4 and Nonindicted 5’s payment of benefits, and all of the facts of the violation of the Specific Economic Crimes Act (Embezzlement) and the occupational embezzlement.

(1) It is difficult to readily conclude that the act constitutes occupational embezzlement on the ground that the relevant affiliate company of ○○ Group is an act in which it is obviously unnecessary or justifiable to appoint and pay Defendant 3 as an executive officer through internal procedures, or the amount of benefits paid falls under an act that considerably deviates from a reasonable level, and thus, is merely an act that constitutes occupational embezzlement.

② It is difficult to view that Defendant 2 had a specific perception about the payment of benefits to Defendant 4 and Nonindicted 5 before April 201 with respect to the payment of benefits to them, and even thereafter, it is difficult to deem that Defendant 1 had an intent to jointly process the crime of embezzlement or had a functional control by essential contribution to the crime.

Examining the reasoning of the lower judgment in light of the relevant legal principles and records, the lower court did not err in its judgment by exceeding the bounds of the principle of free evaluation of evidence against logical and empirical rules, or by misapprehending the legal doctrine on the intent of embezzlement, intent of unlawful acquisition and joint principal offense. The Supreme Court precedents cited in the grounds of appeal in the grounds of appeal are different from this case

D. Determination as to Defendant 1’s violation of the Specific Economic Crimes Act (Misappropriation) regarding the sale of shares held by ○○ Group affiliate companies

1) The case where property damage in the crime of breach of trust is deemed to mean a case where the representative director, etc. of a company inflicts property damage on the company itself in a comprehensive manner. As such, it is reasonable to deem that the amount of damage inflicted on the company is equivalent to the difference between the market price and the purchase price of the stocks of another company in case where the company has had the company buy the stocks of the other company at a higher price. In the case of trading unlisted stocks, if there is a normal example of transaction that reflects the objective exchange value properly, the market price shall be deemed the market price and the value of the stocks shall be assessed on the basis of the transaction price. However, if there is no such case of trading, the relevant laws and regulations governing the evaluation method shall be considered as the market price, and if there is no such case, it cannot be concluded that any one method of evaluation (e.g., the method of evaluation under Article 54 of the Enforcement Decree of the Inheritance Tax and Gift Tax Act) shall be applied at all times according to the purpose of each enactment.

2) On the following grounds, the lower court acquitted Defendant 1 of all the primary charges on the violation of the Specific Economic Crimes Act (Misappropriation of trust) and the ancillary charges on selling the shares of ○○ Group affiliate company.

① It is difficult to view that Defendant 1, who is non-listed shares of Nonindicted Co. 6, Nonindicted Co. 7, Nonindicted Co. 8, Nonindicted Co. 9, and Nonindicted Co. 10 (hereinafter “instant shares”), was aware of, or had an intention to, sell shares to Nonindicted Co. 11, Nonindicted Co. 12, and Nonindicted Co. 13 (hereinafter “purchase affiliate”), at the time of selling shares to Nonindicted Co. 6, Nonindicted Co. 7, Nonindicted Co. 8, Nonindicted Co. 9, and Nonindicted Co. 13, a non-listed shares

② It is difficult to readily conclude that the appropriate purchase price of the instant shares is an amount in accordance with the supplementary evaluation method under the Inheritance Tax and Gift Tax Act or fair value in accordance with the corporate accounting standards. As such, it cannot be deemed that the instant stock purchase did not result in liquidity due to the lack of cash held by the affiliate at the time of the instant stock purchase. Therefore, it cannot be deemed that property damage was inflicted on the affiliate

Examining the reasoning of the lower judgment in light of the aforementioned legal doctrine and the record, the lower court did not err in its judgment by exceeding the bounds of the principle of free evaluation of evidence against logical and empirical rules, or by misapprehending the legal doctrine on the intentional breach

E. The judgment of Defendant 2 and Defendant 7 on the violation of the Specific Economic Crimes Act (Misappropriation) due to the inclusion of Nonindicted Company 15 in Company ATM by Nonindicted Company 14

The lower court, on the grounds indicated in its reasoning, determined as follows: (a) it is insufficient to recognize that Nonindicted Company 16 (hereinafter “Nonindicted Company 14,” collectively before and after the mutual change to “Nonindicted Company 14” on January 9, 2012; and (b) concluded a contract for the supply of ATC over two occasions between Nonindicted Company 17 and Nonindicted Company 17, and that Nonindicted Company 15 (hereinafter “Nonindicted Company 15”) participated in the merger between Nonindicted Company 10 on April 15, 2009, and paid the price of goods to Nonindicted Company 15 after concluding the ATPP joint development agreement, and it is difficult to conclude that Nonindicted Company 2 and Defendant 7 gave instructions to the participation of Nonindicted Company 15, who did not perform any of the roles, was not guilty of the intent of breach of trust; and (c) it is difficult to conclude that Defendant 2 and Nonindicted Company 14, etc. 7, who violated the Specific Economic Crimes Act.

Examining the reasoning of the lower judgment in light of the relevant legal principles and records, the lower court did not err by exceeding the bounds of the principle of free evaluation of evidence against logical and empirical rules, or by misapprehending the legal doctrine on the intentional breach of trust and the occurrence of damages.

F. The judgment on the violation of the Specific Economic Crimes Act (Misappropriation) regarding the acquisition of shares and capital increase with respect to the acquisition of shares by Non-Indicted 14 and capital increase with respect to the defendant 2, 7, 8, and 9

For the reasons indicated in its reasoning, the lower court found that Nonindicted Company 18’s acquisition of the old shares of Nonindicted Company 14 from Nonindicted Company 19 on November 12, 2012, and Nonindicted Company 18, Nonindicted Company 20, and Nonindicted Company 9’s acquisition of new shares issued by Nonindicted Company 14 on December 21, 2012, and on July 29, 2015, it is difficult to view that the act of acquiring the new shares issued by each Nonindicted Company 14 on December 21, 2012 goes beyond the discretionary scope of reasonable business judgment, and determined that it was not guilty all of the Defendants 2, 7, Defendant 8, and Defendant 9’s violation of the Specific Economic Crimes Act (Misappropriation) related to the acquisition of shares of Nonindicted Company 14, and the violation of the Specific Economic Crimes Act (Misappropriation) related to the acquisition of shares by Nonindicted Company 2, and 14.

Examining the reasoning of the lower judgment in light of the relevant legal principles and records, the lower court did not err by exceeding the bounds of the principle of free evaluation of evidence against logical and empirical rules, or by misapprehending the legal doctrine on the intentional breach of trust and the occurrence of damages.

G. Determination on Defendant 5’s taking advantage of Defendant 5’s breach of trust in relation to Nonindicted 21

For the reasons indicated in its reasoning, the lower court found Defendant 5 guilty on the charge of taking property in breach of trust on Defendant 5’s ○○○○○ ○○○ ○○ ○○ ○○ ○○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○, among the part directly received by Defendant 5 from Nonindicted 21 and the part received through Nonindicted 22 from January 208 to December 2010.

Examining the reasoning of the lower judgment in light of the record, the lower court did not err by exceeding the bounds of the principle of free evaluation of evidence against logical and empirical rules, or by omitting judgment, etc.

H. Determination on the guilty part against Defendant 1, Defendant 2, and Defendant 5

Although the prosecutor appealeds the entire judgment of the court below against Defendant 1, Defendant 2, and Defendant 5, there is no indication in the petition of appeal or the appellate brief on the grounds of objection regarding the guilty portion.

I. Judgment on the collection of additional collection due to the offering of a third party by Defendant 2

For the following reasons, the court below reversed the judgment of the court of first instance that sentenced the collection of penalty on Defendant 2 pursuant to the latter part of Article 134 of the Criminal Act, and did not sentence Defendant 2 to the penalty surcharge. In other words, it cannot be deemed that it was proved that KRW 7 billion returned by Nonindicted Incorporated Foundation 23 (hereinafter “Nonindicted Foundation 23”) to ○○ Group affiliate affiliates was identical to the money initially remitted from ○○ Group affiliate affiliates, and it cannot be deemed that the ○ Group affiliate affiliates received the return of KRW 7 billion, and the Defendant’s interest was practically attributed to the Defendant.

Examining the reasoning of the lower judgment in light of the relevant legal principles and records, the lower court did not err in its judgment by exceeding the bounds of the principle of free evaluation of evidence against logical and empirical rules, or by misapprehending the legal doctrine on the identity of money and valuables provided as a bribe

2. As to the grounds of appeal by Defendants 1, 2, and 5

A. Determination as to the occupational breach of trust in relation to the lease of ○○○○○○○○△△△△△△△△△△△○

For the reasons indicated in its holding, the lower court convicted Nonindicted Company 1 on the charge of occupational breach of trust in relation to the lease of ○○○△△△△ Shop shop by Defendant 1, Defendant 2, and Defendant 5 (excluding the part not guilty in the grounds of appeal) by deeming that the act of renting a film store in each of the instant leased companies constituted occupational breach of trust, and that the amount of Nonindicted Company 1 caused property damage. Examining the reasoning of the lower judgment in light of the relevant legal principles and evidence duly admitted, the lower court did not err by failing to exhaust all necessary deliberations, failing to exhaust all necessary deliberations, exceeding the bounds of the principle of free evaluation of evidence against logical and empirical rules, or by exceeding the bounds of the principle of free evaluation of evidence in violation of logical and empirical rules, as well

B. Determination as to Defendant 1’s payment of wages to Defendant 4 and Nonindicted 5 on the violation of the Specific Economic Crimes Act (Embezzlement) and occupational embezzlement

For the reasons indicated in its reasoning, the lower court convicted Defendant 1’s Defendant 4 and Nonindicted 5 of the charge of violation of the Specific Economic Crimes Act (Embezzlement) and occupational embezzlement. Examining the reasoning of the lower judgment in light of the evidence duly admitted, the lower court did not err by exceeding the bounds of the principle of free evaluation of evidence in violation of logical and empirical rules, or by misapprehending the legal doctrine on the criminal intent of embezzlement.

C. Determination on Defendant 5’s taking advantage of Defendant 5’s breach of trust in relation to Nonindicted 21

For the reasons indicated in its reasoning, the lower court convicted Defendant 5 of the charge of taking property in breach of trust (excluding the part not guilty in the grounds of appeal) related to Nonindicted 21 by deeming that Defendant 5 received KRW 350 million per month from July 2013 to May 2016, through Nonindicted 22, 2013, in total, KRW 10 million from Nonindicted 21,000 per month. Examining the reasoning of the lower judgment in light of the evidence duly admitted, the lower court did not err by exceeding the bounds of the principle of free evaluation of evidence in violation of logical and empirical rules, or by misapprehending the legal doctrine on the amount of taking property in breach of trust.

D. Determination as to the receipt of Nonindicted Company 25’s account among Defendant 5’s receipt of property in breach of trust in relation to Nonindicted Company 24

Where the nature of money and valuables provided to a person who deals with another person's business in the crime of taking property in breach of trust is indivisiblely combined with the nature of consideration for illegal solicitation and cases concerning other acts, such money and valuables shall be deemed indivisible (see Supreme Court Decisions 2012Do535, May 24, 2012; 2015Do3080, Jul. 23, 2015).

For the reasons indicated in its reasoning, the lower court: (a) deemed that: (b) Nonindicted 25, a corporation controlled by Defendant 5, received KRW 847,672,232 from Nonindicted Company 24 to May 2016 as a deposit account in the name of Nonindicted Company 25 from Nonindicted Company 24 from around September 2014 to May 2016, Defendant 5 received KRW 847,672,232 in return for illegal solicitation from Nonindicted Company 24; and (c) determined the guilty

Examining the reasoning of the lower judgment in light of the relevant legal doctrine and evidence duly admitted, the lower court did not err by exceeding the bounds of the principle of free evaluation of evidence against logical and empirical rules, or by misapprehending the legal doctrine on the amount of property in breach of trust and collection.

E. Determination on Defendant 1’s other grounds of appeal

1) Although Defendant 1 asserts that the instant public prosecution was instituted by abusing the right to institute a public prosecution, even if Defendant 1 was extremely old, such circumstance alone alone alone does not seem to significantly deviate from the right to institute a public prosecution, and thus, we cannot accept the said assertion. Even if the purport of this part’s assertion is to impose an unfair sentencing, Defendant 1’s appeal on the grounds of unfair sentencing is allowed only in cases where death penalty, life imprisonment, or imprisonment with or without labor for more than 10 years is declared, according to Article 383 subparag. 4 of the Criminal Procedure Act. Thus, in this case where Defendant 1 was sentenced to a more minor punishment, the argument that Defendant 1 is too unreasonable is not a legitimate ground

2) Defendant 1’s defense counsel asserts that the lower court’s conduct of the trial without suspending the trial proceedings against Defendant 1 was unlawful. However, even upon examining the record, it is difficult to view that Defendant 1 had “in a state where he has no capacity to discern himself or make a decision on intention” under Article 306(1) of the Criminal Procedure Act, and thus, it cannot be accepted.

F. Judgment on the offering of a third party bribe by Defendant 2

For the reasons indicated in its reasoning, the lower court, on the grounds indicated in its reasoning, determined that the former president of Nonindicted 26 (hereinafter referred to as “former president”) had supported Nonindicted 23 Foundation 7 billion won when recognizing that the instant request for support to Nonindicted Foundation 23 was a payment for performing duties related to the re-acquisition of a duty-free shop at ○○○○ Group’s major pending issues, and that the said Defendant and ○○ Group had provided the said support to Nonindicted Foundation 23, while recognizing that the former president’s request was a demand for granting the said payment. Accordingly, the lower court upheld the first instance judgment that found Defendant 2 guilty of this part of the charges of offering a third party’s bribe, and rejected the Defendant’s allegation in the grounds for appeal on this point.

Examining the reasoning of the lower judgment in light of the relevant legal principles and evidence duly admitted, the lower court did not err in its judgment by failing to exhaust all necessary deliberations, contrary to what is alleged in the grounds of appeal, by exceeding the bounds of the principle of free evaluation of evidence in violation of logical and empirical rules, or by misapprehending the legal doctrine on illegal solicitation in the crime of offering a third party, recognition of quid pro quo, and compatibility

The Supreme Court precedents cited in the grounds of appeal are different from this case, and thus are inappropriate to be invoked in this case.

3. Conclusion

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

Justices Kim Jae-hyung (Presiding Justice)

1) Of the lower judgment, the part on the case No. 2017No3788 is limited.