All appeals by the Defendants and the Prosecutor are dismissed.

1. Summary of grounds for appeal;

A. The Defendants asserted misunderstanding of facts and misunderstanding of legal principles in the petition of appeal filed on January 25, 2017, but explicitly withdrawn the above assertion on March 9, 2017 and the first trial date.

The punishment sentenced by the court below against the defendants (the punishment imposed on the defendants A: three years of imprisonment and the defendant B's living cooperative (hereinafter referred to as "defendants cooperative"): 5 million won) is too unreasonable.

B. Prosecutor 1) In fact, Defendant A knew that there was a lack of quorum for promoters under Articles 13 and 21(1) of the Consumer Life Cooperative Act (hereinafter “Life Cooperative Act”), but completed the establishment registration with authorization for the establishment of the Defendant Cooperative, and the first and second promoters’ meetings were actually held.

In light of the fact that Defendant A cannot be seen as having paid all the contributions, and that Defendant A, the president of the Defendant Union, has registered the establishment of the Defendant Union by unlawful means.

Nevertheless, the judgment of the court below which acquitted the Defendants of this part of the facts charged is erroneous by misapprehending the facts and affecting the conclusion of the judgment.

2) The sentence sentenced by the lower court against the Defendants is too unhued and unreasonable.

2. Determination

A. As to the prosecutor’s assertion of mistake of facts, 1) To establish a consumer life cooperative in this part of the facts charged, at least 30 persons who are qualified as members shall prepare its articles of association and undergo the resolution of the inaugural general meeting. The total amount of investments shall be at least 30,000,000 won, and the number of shares per member shall not exceed 20/100 of the total number of shares of investment.

A) Defendant A’s Defendant 33 promoters who have no address, etc. within the business area are not qualified as a partner, and the number of promoters is 30.