Representative Yoo Jun-won of Sangsangin Group, who was indicted on charges of illegal loans, was sentenced to 4 years in prison in the first trial. The first trial ruling came 4 years and 7 months after the prosecution's indictment. However, he was not detained in court.
On the 18th, the 34th criminal division of the Seoul Central District Court (presided over by Director General Han Seong-jin) sentenced Representative Yoo to 4 years in prison and a fine of 18.549 billion won for violating the Capital Market and Financial Investment Business Act. An additional 112 million won was also ordered to be confiscated. The court ruled him not guilty of charges related to market manipulation and breach of trust under the Act on the Aggravated Punishment of Specific Economic Crimes.
The first trial ruling for Representative Yoo came 4 years and 7 months after he was indicted by the prosecution in July 2020. The prosecution accused him of conspiring with the representatives of nine KOSDAQ-listed companies from April 2015 to December 2018 to create and sell loan products that falsely published that the listed companies successfully attracted investment by issuing convertible bonds (CBs) while actually engaging in high-interest collateral loan operations. He is also accused of falsely publishing that a normal investment company had subscribed to the CBs by using a paper company and of falsely reporting that he provided all the funds to the listed companies without actually doing so. Previously, the prosecution requested the court to impose a sentence of 9 years in prison, a fine of approximately 13.49 billion won, and a confiscation of 112 million won.
The first trial court judged that Yoo's failure to publicly disclose that the issuer of the CBs provided collateral to the savings bank constituted fraudulent transactions. The court noted, "Yoo Jun-won and his accomplices designed the loan and convertible bond issuance structures according to the needs of the issuing companies and continued their crimes repeatedly over several years, obtaining large-scale profits." It added, "Yoo Jun-won engaged in fraudulent transactions during the issuance process of the convertible bonds of Hanp, of which he is a major shareholder, and sold all his shares in Hanp, realizing tens of billions of won in capital gains, which caused significant losses to numerous retail investors due to the sharp drop in Hanp's stock price."
Representative Yoo was also convicted of profiting from trading on undisclosed important information about KOSDAQ-listed company Moda. He reportedly obtained undisclosed information about Moda in advance through broker Kim, who was involved in a past stock manipulation case, and traded stocks, realizing capital gains of 112 million won. The court stated, "Considering the stock transactions between Yoo Jun-won and Director Kim, and the fund transfers by Yoo, it is recognized that Yoo participated in the use of undisclosed information regarding Moda."
However, he was acquitted of charges that he artificially inflated the stock price by purchasing treasury stocks of Sangsangin, the holding company. The court concluded, "All necessary regulatory requirements for the acquisition of treasury stocks were followed, and it is difficult to see that there was an intention to induce trading." It continued, "False buy orders, high-price buy orders, and volume depletion orders cannot be considered as price manipulation." Regarding the prosecution's assertion that a loan of 3.4 billion won given by Sangsangin Plus Savings Bank to Kai Investment on December 18, 2017, constituted breach of trust, the court ruled it as not guilty, stating, "There is insufficient evidence to acknowledge Yoo Jun-won's breach of obligation related to the loan."