In an appeals court decision, former Kumho Asiana Group Chairman Park Sam-koo, who was previously sentenced to 10 years in prison for unfairly supporting affiliates and embezzling company funds, received a reduced sentence of 2 years and 6 months with a 4-year probation. The appellate court overturned the initial court’s decision, which had found him guilty of embezzlement and breach of trust, declaring him not guilty of these charges.
The Seoul High Court’s Criminal Division 2, presided over by Judge Kim Jong-ho, replaced the original 10-year sentence with this lighter penalty. Three other executives from the Kumho Group’s Strategic Management Office, who were also involved in the case, received suspended sentences ranging from 1 to 1.5 years or were acquitted. Kumho Construction was fined 2 billion KRW for violating the Fair Trade Act, the same as in the previous trial.
The court highlighted Park’s offenses as deliberately contravening the Fair Trade Act, aiming to restore and enhance his control over the Kumho Group, which went against efforts to prevent economic power concentration within large corporate groups. Despite acknowledging his pivotal role and benefiting directly from these acts, the court noted mitigating factors, such as industry consensus on his regained control and his lack of previous serious criminal history.
Park was accused of using group affiliates to support Kumho Express, where his family’s stake was high, to regain management control. Furthermore, he was charged with handing Asiana Airlines’ in-flight meal business to the Swiss Gate Group at a low price and obligating them to purchase Kumho Express bonds as a return benefit.
The initial court had found him guilty in August 2022 for embezzling 330 billion KRW to acquire stakes in Kumho Industries and underpricing Kumho Terminal shares to Kumho Corp. (now Kumho Express). However, the appeal court dismissed the embezzlement and breach of trust charges while upholding the Fair Trade Act violation.
Regarding the alleged embezzlement for Kumho Industries’ shares, the court noted that although funds from affected companies were used for acquiring shares, these transactions followed valid asset-backed commercial paper structures, were properly collateralized, and all repayments, including principal and interest, were duly honored. It also noted that the alleged underpricing in selling Kumho Terminal shares did not constitute breach of trust since the sale price, despite having a variable assessment range, was not considerably undervalued. Additionally, concerning the in-flight meal business deal, the court concluded that despite the associated financial support, the contract conditions weren’t evidently disadvantageous.