Nam Hyun-woo has worked as a staff writer at The Korea Times since 2013, mostly covering business and politics. He currently belongs to the Business Desk where he covers topics such as emerging tech, AI, ICT and Korea's chaebol community. Prior to joining the team, he was the paper's correspondent for the presidential office of Korea during the Yoon Suk Yeol and Moon Jae-in administrations.
Top court clears SPC chairman of breach of trust charges
SPC Group Chairman Hur Young-in, center, leaves the Seoul Central District Court in Seocho District, Seoul, Feb. 2, 2024, after being acquitted of charges including breach of trust. Joint Press Corps
By Nam Hyun-woo
Korea’s top court on Thursday acquitted SPC Group Chairman Hur Young-in of charges that he allegedly ordered the sale of stocks in the group’s affiliates at a low price to avoid gift taxes.
The Supreme Court upheld a Seoul High Court ruling, which acquitted Hur of breach of trust charges related to his alleged order to dump affiliate shares in 2012. The ruling also found former SPC Group President Cho Sang-ho and SPC CEO Hwang Jae-bok not guilty.
Hur was indicted for instructing group affiliates Paris Croissant and Shany to sell stocks of Mildawon, another SPC company producing flour, to SPC Samlip at 255 won per share in December 2012, a price far cheaper than the appraised 2011 price of 1,180 won.
Prosecutors suspected that the transaction's purpose was to avoid gift tax, viewing the appropriate price for Mildawon at 1,595 won. They claimed that the stock sale inflicted losses of 5.81 billion won on Shany and 12.16 billion won on Paris Croissant, while giving SPC Samlip proceeds of 17.97 billion won.
However, a district court in February sided with Hur, citing insufficient evidence. The appeals court also found him not guilty because the stock price valuation method in question cannot be seen as illegal. Thus, it is difficult to view the stock sale as an act of breach of trust.
The Supreme Court, which only reviews whether there were errors in the application of the law in lower court rulings, also said that the high court ruling did not have “any misinterpretation of legal principles.”
“Following the district court and the high court trials, today’s Supreme Court decision has definitively confirmed that the transfer of Mildawon shares was lawful and had no improper purpose,” said lawyer Seong Chang-ho at law firm Lee & Ko, the legal representative of Hur.
“The ruling also confirmed that the transaction was a measure aimed at improving the company’s governance structure.”