DB Group founder and chair Kim Joon-ki, who was indicted on charges of omitting 15 companies under a foundation from affiliates when submitting materials for corporate group designation to the Korea Fair Trade Commission, denied the charges at his first trial. He argued he did not have actual control over the omitted companies and had no awareness that the submitted materials were false.
On Sept. 4, Judge Lee Hwan-gi of the Seoul Central District Court's Criminal Division 26 held the first hearing for Kim, who was indicted on charges of violating the Monopoly Regulation and Fair Trade Act.
Kim is accused of leaving out the Donggok Social Welfare Foundation and 15 companies under the foundation from the list of affiliated companies when submitting materials to the Korea Fair Trade Commission for designation as a disclosure-subject corporate group. A disclosure-subject corporate group is a system under which the Korea Fair Trade Commission designates business groups above a certain size and requires disclosure of affiliate status and governance structures. To make the designation, the Korea Fair Trade Commission receives related materials such as information on affiliates from the owner side.
Kim's side denied the indictment, saying the companies cannot be viewed as affiliates of DB Group.
Kim's attorney said, "The Korea Fair Trade Commission (FTC) excluded companies under the Donggok Social Welfare Foundation from DB affiliates in 1999," adding, "They were later readmitted during a subsequent review, and a lawsuit seeking to overturn the related FTC disposition is currently underway."
The attorney added, "Objectively, there is no equity relationship between DB Group and the companies, yet prosecutors and the Korea Fair Trade Commission (FTC) are inferring control based on indirect facts not directly related to control," and argued, "It is difficult to conclude the defendant recognized the falsity of the submitted materials."
The Korea Fair Trade Commission (FTC) sees it differently. The FTC concluded that by 2010 at the latest, DB had used the companies under the foundation to maintain the controlling family's power and private interests, and in 2016 even created a managerial position to oversee these companies, exerting full-fledged influence. The FTC filed a complaint with prosecutors against Kim this February, two years and five months after starting its investigation.
Prosecutors sought a summary indictment requesting a fine rather than sending Kim to a full trial, and the court issued a summary order in May imposing a fine of 150 million won. Kim objected and requested a formal trial, bringing the charges back into dispute in court that day.
The court scheduled the next hearing for Jan. 15 next year.