Chair Heo Gi-ho of Hanil Holdings, who was indicted on charges of manipulating the stock prices of a holding company and its subsidiary during a merger, was acquitted again on appeal of key charges including price manipulation. As in the first trial, the court found only the violation of disclosure obligations related to borrowed-name accounts guilty and imposed a fine of 100 million won.
The Criminal Division 13 of the Seoul High Court (Presiding Judge Baek Kang-jin) on the 22nd upheld the lower court's ruling for Chair Heo, who was indicted on charges including violating the Financial Investment Services and Capital Markets Act and breach of trust under the Act on the Aggravated Punishment of Specific Economic Crimes. The panel said, "Since we agree with the lower court's findings of fact, the sentence appears to be one determined with appropriate consideration of other sentencing factors," and did not accept the appeal.
President Jeon Geun-sik of Hanil Cement, who was indicted along with Heo, maintained a not-guilty verdict. Four executives and employees who carried out price-manipulative on-exchange accumulation using Heo's borrowed-name accounts received suspended prison sentences.
Heo was indicted in Nov. 2021 on charges including manipulating prices by using borrowed-name accounts during the 2020 process in which Hanil Cement absorbed HLK Holdings in a merger. Allegations of breach of trust were also handled together, including that, during the 2018 transition to a holding company structure, Hanil Cement shares were contributed in kind to Hanil Holdings at a low price, causing the company damage in the 30 billion won range.
In the first trial, the court found Heo not guilty of major charges such as price manipulation, breach of trust, and concealment of criminal proceeds, and recognized only the violation of disclosure obligations due to failure to report shares in borrowed-name accounts as guilty, imposing a fine of 100 million won. The second trial reached the same conclusion.
The appellate court judged regarding whether Heo colluded with employees to commit price manipulation that "there is a motive to conspire, but there are also clear circumstances negating a conspiratorial relationship." It is difficult to view the employees' transactions as being based on reporting or instruction, and the fact that economic benefits were attributed is not, by itself, proof of conspiracy. The panel said, "No new evidence proving conspiracy has been presented up to this court."
However, the panel noted in the sense of finding it difficult to avoid responsibility, "Heo says this happened below without his knowing, but it is also hard to see that he had no knowledge at all." It added that, even taking this premise into account, it is hard to view the sentence as heavy.