[Alpha Biz=(Chicago) Reporter Paul Lee] Prosecutors have demanded a five-year prison term for SPC Group Chairman Huh Young-in, who was indicted on charges of ordering the transfer of shares of affiliates at low prices for the purpose of evading gift taxes.

In Chairman Huh's decision-making hearing held at the Seoul Central District Court's Criminal Agreement Department 24 (Presiding Judge Choi Kyung-seo) on the 8th, the prosecution demanded the sentence, saying he only considered the interests of the head's family. Former SPC Group President Cho Sang-ho and SPC CEO Hwang Jae-bok, who were indicted together, were each sentenced to three years in prison.

Chairman Heo and others were indicted in December 2012 on charges of acquiring Mildawon shares (KRW 3,038 in 2008) or selling them to Samlip for KRW 255, lower than the previous year's appraised value (KRW 1,180). The prosecution judged that the deal caused 5.81 billion won in damages to Shani and 12.16 billion won to Paris Croissant.

If Paris Croissant and Shani do not sell Mildawon's shares to Samlip, the total family members were expected to be taxed at 800 million won every year. The prosecution believes that this has saved Chairman Huh 7.4 billion won in gift taxes over the past decade.

On the other hand, Heo's lawyer countered, "There is no connection between the avoidance of gift taxes and the transfer of low-priced stocks," adding, "It is based on the premise that breach of trust is in self-interest, but breach of trust cannot be a problem after selling it at a loss."

 

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