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S.Korea's Hanwha chairman gets suspended sentence in new ruling
February 11, 2014 / 9:11 AM / in 4 years

S.Korea's Hanwha chairman gets suspended sentence in new ruling

SEOUL, Feb 11 (Reuters) - A South Korean court gave Hanwha Group Chairman Kim Seung-youn a suspended sentence on Tuesday, overturning a landmark decision that had forced a head of a major conglomerate to serve time for breach of trust.

In giving the lighter sentence, the Seoul High Court took into account his contributions to South Korea’s economic development and his poor health, presiding judge Kim Ki-jeong told a packed courtroom.

When Kim first received a four-year prison sentence in 2012 for illegally diverting funds from healthy affiliates to weaker companies he owned, it was widely interpreted as a fresh hardline stance by courts against misdeeds by leaders of South Korean family-owned conglomerates.

The 2012 ruling had come amid an election campaign by current President Park Geun-hye on a platform to outlaw soft sentences for embezzlement and other common offences committed by executives at the conglomerates, also known as chaebol. Energy-to-insurance conglomerate Hanwha is the country’s tenth biggest business group.

Before that, four heads of the Samsung, Hyundai, SK and Hanwha chaebol who were convicted of crimes got only suspended sentences and then later received presidential pardons.

Kim, now 62, served part of his sentence but was released to hospital in January last year for an undisclosed illness. The sentence had been reduced to three years in 2013 on an appeal and has now been suspended for five years.

After Kim’s sentencing, SK Holdings Chairman Chey Tae-won received a four year prison term for embezzling corporate funds and has been in jail for a little over a year. Chey, 54, is due to have a ruling in his appeal this month.

CJ Group Chairman Lee Jay-hyun, also 54, faces a lower court ruling this month on charges relating to tax evasion and the formation of a slush fund. Lee was detained in July of last year, but the detention was suspended due to poor health resulting in a kidney transplant.

Editing by Edwina Gibbs

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