Court acquits SPC Group chairman of breach of trust charges
SPC Group Chairman Hur Young-in speaks to reporters after he was found not guilty on the charge of breach of duty, at the Seoul Central District Court, Friday. Yonhap
The Seoul Central District Court acquitted SPC Group Chairman Hur Young-in, the head of Korea's biggest bakery company, over charges of gift tax evasion and breach of trust, the court said Friday.
The court acquitted Hur and the group's two executives, dismissing the prosecutors' indictment that SPC deliberately sold shares of Mildawon, an affiliate of Paris Croissant and Shany which manufactures flour, to Samlip for an undervalued price to increase Samlip's business profit.
Paris Croissant, Shany and Samlip are all subsidiaries of SPC Group, with Samlip being the only publicly listed company among the group's subsidiaries.
The court said that Hur didn't have any intention to commit the alleged crimes and that it was only part of the company's legal business activities.
In December 2012, Hur sold Mildawon's shares to Samlip at 255 won ($0.19). Paris Croissant and Shany acquired Mildawon shares in 2008 at 3,038 won and the same shares were valued at 1,180 won per share in 2011. The prosecutors said the trade caused Paris Croissant a financial loss of 12.2 billion won and Shany 5.81 billion won while Samlip profited almost 18 billion won.
The court said, however, that the alleged dumping of Mildawon's shares eventually caused Hur the same business loss because he owned 100 percent of Paris Croissant and Shany. The court said that fact makes it implausible that he sold the shares at the controversial price for profiteering.
The prosecution had also accused Hur of ignoring Midawon's potential market value when selling its shares at an undervalued price. However, the court rebutted that it is hard to predict successive growth in the share values of companies in grain or food manufacturing businesses. It added that determining the value of a company share by taking into account its future market value ultimately involves a subjective view.
Upon the court's ruling, SPC Group released a statement expressing appreciation to the court for resolving the misunderstandings.
On Thursday, the Seoul High Court ordered the Fair Trade Commission (FTC) to cancel a 64.7 billion won fine against SPC, ruling that the antitrust agency's decision was made without sufficient evidence.
The antitrust agency levied the fine in 2020 for allegedly engaging in illegal business activities to increase the market size of Samlip and leverage the effect to smooth the transition of its managerial leadership within the group's owner family.