The CEO of jewelry company Jestina has been sentenced to a suspended prison term for mislabeling Chinese wristwatches as domestic products. On October 15, the Seoul Eastern District Court's Chief Judge Yang Hwan-seung sentenced CEO Kim to one year in prison, suspended for two years, after finding him guilty of violating the Foreign Trade Act and the Distribution Support Act. Four Jestina employees who were tried alongside him received fines of 8 million won each.
From 2017 to 2023, Kim and his associates imported approximately 120,000 low-cost wristwatches from China and sold them as domestic products. Prosecutors found that they erased the 'Made in China' label from the watches using acetone and then reassembled them to disguise their origin.
Additionally, they misled the Public Procurement Service by pretending to manufacture watches sourced from another factory, allowing them to participate in bids. During the prosecution's closing arguments on August 31, they sought a three-year prison sentence for Kim and six months to one year and six months for the four employees.
Throughout the trial, Kim's defense claimed he was unaware of the origin marking violations and argued that there was no reason to condone or instruct illegal activities given the company's revenue. They also stated that he had not been informed about the bidding and supply processes involving the Public Procurement Service.
However, the court rejected Kim's claims. The judge noted that objective evidence, including employee reports and business plans, indicated that Kim was aware of the violations but overlooked them for business reasons. The court concluded that the bidding process with public institutions was conducted under Kim's direction.
Judge Yang stated, 'The damage caused by the alteration of origin markings and the misrepresentation of domestic products severely harms the integrity of international trade and consumer trust.' He emphasized that given the symbolic nature and organizational structure of the company's watch business, it was unreasonable to believe Kim was unaware of these actions.
He added, 'Considering the potential risks to the company's reputation, it is implausible that employees could secretly pursue such actions without the CEO's knowledge or approval.' The court did, however, take into account that Kim had no prior criminal record and that such practices had been ongoing in the company before his tenure.
As for the employees, the court noted that they were first-time offenders who acknowledged their mistakes and expressed remorse, which was considered in their sentencing.
* This article has been translated by AI.
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