At the first trial, the side of Chair Jeong Dowon of Sampyo Group, who was indicted on charges of providing undue benefits to his eldest son's company during the succession process, denied the charges.
The Seoul Central District Court Criminal Agreement Division 24 (Presiding Judge Lee Young-seon, Director General) on the 22nd held the first trial for Chair Jeong, who was indicted on charges of violating the Fair Trade Act and violating the Act on the Aggravated Punishment of Specific Economic Crimes (breach of trust), and former CEO Hong Seong-won.
Jeong and others are accused of providing undue support by giving about 7.4 billion won in benefits to the affiliate SP Nature. SP Nature, which supplies powders used in ready-mix concrete manufacturing, is known to have Jeong's eldest son, Jeong Dae-hyun, senior vice chair of Sampyo Group, as its largest shareholder.
Prosecutors believe Sampyo Industry purchased powders through SP Nature at a price about 4% higher than non-affiliates from January 2016 to December 2019. Their view is that, under a succession plan, Sampyo Group set a groupwide management policy to grow SP Nature, and accordingly had Sampyo Industry purchase powders only from SP Nature.
Prosecutors also believe that in this process the purchase price of the powders was set above the market price, allowing SP Nature to reap unilateral gains while Sampyo Industry suffered corresponding losses.
Jeong's side countered that the transaction was a normal one and therefore breach of trust does not apply. Jeong's attorney said, "The terms of transactions between Sampyo Industry and SP Nature are clearly different from the contract terms between Sampyo Industry and non-affiliates."
The attorney argued that, beyond supplying powders, SP Nature provided separate services to Sampyo Industry that were not offered to non-affiliates, such as top-priority stable supply and acting in place of the purchasing team. The attorney added, "The prosecution assumes the transaction counterpart is the same," and said, "The basic premise of the indictment differs from facts that can be seen in key evidence such as the contracts."
Jeong's side also argued that simply having a large transaction volume does not mean SP Nature was provided an economic benefit. Jeong's side said, "Under Korea Fair Trade Commission (FTC) rules, one may consider whether support created cost-saving effects from economies of scale or eliminated business risks," and added, "But in this case, neither applies."
Earlier, the Korea Fair Trade Commission filed a complaint against Sampyo Industry in Aug. 2024 for alleged violations of the Fair Trade Act. Prosecutors then began an investigation and in November last year sent Jeong and other related parties to trial.