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(2nd LD) Supreme Court upholds suspended jail term for SK Group chief
By Kim Hyun
SEOUL, May 29 (Yonhap) -- The Supreme Court on Thursday upheld an appellate court ruling that convicted the chairman of SK Group of breach of trust but suspended his prison term, citing his intentions to reform the family-run conglomerate.
The ruling ended a five-year-long court battle for Chey Tae-won, whose young leadership has been tainted by civic accusations that he engineered the window dressing of accounts and profited from insider stock trading.
The top court found Chey guilty, but upholding the Seoul High Court's 2005 verdict, suspended his three-year prison sentence for five years in consideration of his pledge to enhance management transparency, according to the ruling issued by Presiding Judge Jeon Soo-ahn.
The trial began in 2003 after a leading civic group, Solidarity for Economic Reform, raised allegations of corruption against Chey and other senior executives as part of its reform campaign on family-run conglomerates, also known as chaebol.
The civic group accused the SK chief of fraudulently inflating profits worth 1.55 trillion won (US$1.5 billion) by SK Global, which has been renamed as SK Networks, and selling unlisted stock he owned in the five-star Walkerhill hotel at an inflated price in the process of his stock swap with another SK unit, aimed at keeping his management control on the SK Group.
Unlisted companies have been a main device for Korean enterpreneuers to keep or move wealth and management rights. Damage was often incurred on minor shareholders.
In the first verdict by the Seoul Central District Court in 2004, Chey was sentenced to three years in jail.
The rare prison sentence for a conglomerate head, however, was reduced to a suspended jail term in the High Court in 2005, whose judicial members are generally considered more conservative than the lower court.
Explaining the suspended term, the appellate court then said, "Most of the problems that the SK Group has had, such as bad management in SK Global, cannot be attributed to the defendant and he committed the crimes while attempting to resolve SK's problems, and he is now determined to bring transparency to the group management."
The plaintiff expressed regret, saying the final ruling on Thursday effectively freed the chairman from burden to reform.
"This is another problematic ruling by the Judiciary that raised public distrust and confirmed the conception that the rich are not guilty but the poor are guilty," Kim Sang-jo, an economics professor at Hansung University and a leading member at the civic group, said.
He said the top court sidestepped the sensitive issue of how unlisted stock trading is abused by conglomerates.
Meanwhile, the Supreme Court ruled on Chey's case on the appeal of prosecutors. Chey himself dropped his appeal late April.
hkim@yna.co.kr
(END)
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