A suspended prison sentence has been finalized for former Samyang Foods Chairman Jeon In-jang, who was brought to trial on charges of issuing fake tax invoices worth about 50 billion won using paper companies.
The Supreme Court's Second Division (presiding Justice Oh Kyung-mi) on the 10th finalized the lower court ruling that sentenced the former chairman, indicted on charges of violating the Act on the Aggravated Punishment of Specific Crimes, to three years in prison, suspended for five years, and a fine of 19.1 billion won. For Samyang Foods, one affiliate, and one company that is both a paper company and a subsidiary of an affiliate—three companies indicted together for violating the Punishment of Tax Offenses Act—fines of 10 million won each were finalized.
The former chairman was brought to trial in Dec. 2019 on charges that from 2010 to 2017 he received fake tax invoices and invoices worth about 50 billion won through two paper companies he operated. As Samyang Foods procured materials and supplies through an affiliate, tax invoices and invoices were issued to or received by the paper companies for the purpose of tax evasion.
In the first trial, the former chairman was sentenced to three years in prison, suspended for five years, and a fine of 19.1 billion won. The appellate court reduced the sentence to one year and six months in prison, suspended for three years, and a fine of 650 million won. The appellate panel found the defendants not guilty of violating the Punishment of Tax Offenses Act, saying two affiliates conducted business independently and paid value-added taxes.
In Feb. last year, the Supreme Court quashed and remanded the case, holding that the transactions the appellate court had deemed not guilty also constituted the issuance of false tax invoices. The court found it reasonable to conclude that because the paper company's business registration existed at the affiliate's establishment, tax authorities were highly likely to be confused, and that, for the purpose of embezzlement, the affiliate's sales were transferred to the paper company while falsely preparing and submitting a summary of tax invoices.
On remand, following the Supreme Court's reasoning, the court found guilty the parts previously deemed not guilty on appeal and sentenced the former chairman to the same punishment as in the first trial: three years in prison, suspended for five years, and a fine of 19.1 billion won. The Supreme Court dismissed all of the defendants' appeals.
The former vice chairman was brought to trial on charges including siphoning off a little over 4.9 billion won by making it appear that, from 2008 to 2017, some of the packaging boxes and food ingredients that Samyang Foods received from affiliates were supplied by a paper company, and in Jan. 2020 the Supreme Court finalized a three-year prison sentence.