[Apha Biz=(Chicago) Reporter Paul Lee] Yoon Kyung-lip, 65, CEO of Yuhwa Securities Co., who is suspected of conducting fictitious transactions by mobilizing employees to take over management rights to avoid the burden of inheritance tax, was sentenced to prison in the first trial on the 8th and put under court custody.

The Criminal Affairs Agreement Department 13 (Presiding Judge Myung Jae-kwon) at the Seoul Southern District Court sentenced CEO Yoon, who was put on trial later in the day on charges of violating the Capital Market Act, to one and a half years in prison and a fine of 500 million won.

A fine of 500 million won was also imposed on Yuhwa Securities Corporation.

The court also issued an arrest warrant for Yoon and arrested him in court.

CEO Yoon is suspected of mobilizing his pre-consulted executives and employees to first buy about 800,000 shares (worth 12 billion won) held by founder and late father Yoon Jang-sup, honorary chairman of Yoohwa Securities Co., from November 2015 to June 2016.

He first bought 680,000 shares of Yuhwa securities owned by his father, Chairman Yoon, twice, and bought an additional 116,000 shares owned by Eugene Investment & Securities and Daishin Securities as his own shares, the survey showed.

Prosecutors believed that Yoon, who was over 90 years old at the time, engaged in consolidated trading to reduce the inheritance tax burden and solidify his control of the company.

If CEO Yoon just inherits the shares of his father, who is a related party, he had to pay inheritance tax based on the amount assessed by 30% of the stock price for two months. 

 

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