Former Executives of Sehwa IMC Receive Suspended Sentences for Embezzlement

200 billion won in company funds were embezzled by former executives of Sehwa IMC, leading to confirmed suspended prison sentences.

The Supreme Court's first division, led by Justice Cheon Dae-yeop, upheld the lower court's sentence on October 1, which sentenced Yoo, the former chairman of Sehwa IMC, to 2 years and 10 months in prison, suspended for 5 years.

Yoo's son, Yoo, the former vice chairman, received a 3-year prison sentence, suspended for 5 years, along with a fine of 1 billion won. Kang, the former vice president, was sentenced to 2 years and 6 months in prison, suspended for 4 years, and fined 420 million won.

From February 2013 to January 2018, the defendants were accused of embezzling approximately 2.7 billion won in company funds through various means, including about 1.06 billion won related to fund loans, inflating transaction prices for kickbacks, issuing false advance payments to partner companies, creating fictitious agent commissions for paper companies, false employee salaries, loans to affiliated companies, golf course construction costs, and misappropriating employee welfare funds and severance pay.

Additionally, Yoo, the former vice chairman, and Kang were charged with issuing and receiving numerous false tax invoices without actual transactions between Sehwa IMC and related companies, leading to tax evasion of value-added tax and corporate tax from 2014 to 2017.

In the first trial, Yoo, the former chairman, was sentenced to 3 years in prison, Yoo, the former vice chairman, to 5 years, and Kang to 3 years and 6 months. In a separate trial for tax evasion, the first court imposed suspended sentences and fines on Yoo, the former vice chairman, and Kang, along with a fine of 500 million won on the company.

In the second trial, which combined the cases, some embezzlement and tax evasion charges were found not guilty, leading to reduced sentences. Yoo, the former chairman, received a 2-year and 10-month sentence, suspended for 5 years; Yoo, the former vice chairman, received a 3-year sentence, suspended for 5 years, and a fine of 1 billion won; and Kang received a 2-year and 6-month sentence, suspended for 4 years, and a fine of 420 million won. The company was granted a suspension of the 500 million won fine.

The court noted, "The culpability is very serious, but some of the acts appear to have been motivated by the need to support affiliated companies, and some amounts were not used." It also considered that the major shareholder, a victim in the case, did not wish for punishment against the defendants.

The Supreme Court also rejected appeals from Yoo, the former chairman, and the prosecution, maintaining the appellate court's decision.

Meanwhile, Sehwa IMC, a small manufacturing company in the Gwangju area, changed its name to Dynamic Design following the indictment of its executives, including the former chairman Yoo.