Supreme Court reverses appellate verdict against CJ’s chairman

Supreme Court reverses appellate verdict against CJ’s chairman. September. 11, 2015 07:12. djc@donga.com.

Chairman Lee Jae-hyun (aged 55) of CJ Group who was accused of evasion of taxes, embezzlement and malpractice, and sentenced three years in prison will stand trial again.

On Thursday, the second Supreme Court (Chief justice Kim Chang-seok) reversed the appellate judgment that sentenced Lee three years in prison and fined some 25.2 billion Korean won (approx. 21.2 million U.S dollars), returning the case to the High Court. The appellate court ruled that some 3.95 billion Japanese Yen (approx. 30.9 billion won) that Lee borrowed by using its corporate firm in Japan as a joint surety while “Pan Japan”, whose practical owner is Lee, was purchasing two buildings in Japan was Lee’s personal profit gained from malpractice. The Supreme Court, however, reversed the decision of the appellate court on the ground that accurate profit or loss can’t be estimated since Pan Japan had financial capability to pay back the loan, meaning that it’s hard to say that Pan Japan caused financial damage amounting to the entire loan to CJ’s Japanese corporate.

Admitting the charge of malpractice, the Supreme Court sees that the crime of malpractice under the criminal law, not under the Act of Aggravated Punishment for Specific Economic Crimes should be applied as the amount of profit can’t be decided. Under the aggravated act, the malpractice which produced 5 billion won (approx. 4.2 million dollars) of personal profit or company’s loss could be sentenced with life imprisonment or imprisonment of five years or longer. On the other hand, malpractice under the criminal law causes five years or shorter imprisonment, based on which some predict that Lee could be put on probation when he was tried again.

Same as the appellate court, the Supreme Court also gave the guilty verdict to Lee for tax evasion of some 25.1 billion won (approx. 21.1 million dollars) and embezzlement of 11.5 billion won (approx. 9.7 million dollars). Currently, Chairman Lee is on suspension of execution of confinement and hospitalized in Seoul National University Hospital.