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An appeals court has upheld the conviction of the former and current president of the Samsung Group¡¯s quasi holding company Everland for facilitating the underhand passing of the Samsung crown to group chairman Lee Kun-hee¡¯s only son. Her Tae-hak and Park Ro-bin were convicted of selling convertible bonds in the firm at knockdown prices to Lee junior.
The Seoul High Court on Tuesday sentenced Her and Park to three years in prison, suspended for five, and fined them W3 billion each. (US$1=W928). The lower court convicted them on charges of having sold Everland CBs at below-market prices and thus causing damage to the company's shareholders. It sentenced Her to the same punishment and Park to a two-year jail term suspended for three. The appeals court upheld the conviction for breach of trust and said the two caused the company W97 billion in damage. That meant Park got a heavier sentence since damage above W50 billion is subject to punishment for specific economic crimes.
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Employees at the Samsung Group's main building on Tuesday, when the Seoul High Court upheld the conviction of the former and current CEOs of the group¡¯s quasi holding company.
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The court also voided the Everland board of directors¡¯ decision to issue the CBs in October 1996 because the board meeting was short of the quorum. That could have a massive ripple effect for the group since it effectively empowers current executives or shareholders of Everland to reverse, through civil action, the decision to issue the CBs.
"The defendants are guilty of breach of trust given that the Everland board¡¯s decision helped Lee¡¯s son Jae-yong acquire Everland stocks after Samsung affiliates with rights to acquire the bonds forfeited, allowing Lee junior make profits amounting to some W8.9 billion, and therefore caused the same amount of loss to the company,¡± the court said.
(englishnews@chosun.com )
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