Seoul court sentenced LIG Group Chairman Koo to three years in jail for fraudulently issuing $200 million commercial papers under the name of the group’s construction arm, despite knowing that the builder was on the verge of falling undder

2013-09-15 16:52

Penalizing tycoons

A Seoul court has meted out severe prison sentences to the chairman of a conglomerate and his son in what appears to be the court’s strengthening of its sentencing guidelines for serious economic crimes. This must be a positive development, given that the court often faced harsh criticism for handing out light sentences to chaebol tycoons, not commensurate with the severity of their crimes, under the deep-seated practice of ”one law for the rich and another for the poor.’’ Such practices of light sentences have been cited as one of the reasons behind incessant economic crimes.On Friday, the Seoul Central District Court sentenced LIG Group Chairman Koo Cha-won, 78, to three years in jail. He was charged with fraudulently issuing commercial papers worth more than 200 billion won under the name of the group’s construction arm, despite knowing that the builder was on the verge of falling under court receivership.
The illicit issuance of the short-term debt inflicted huge losses to 800 innocent investors. Koo, who had been standing trial but not in detention due to his advanced age and poor health ― he underwent liver cancer surgery in 2010, was taken into custody immediately after the verdict was announced. Koo Bon-sang, his eldest son and vice chairman of LIG Nex1, a defense systems manufacturer, was given eight years in prison on the same charge.
The court said that Chairman Koo and his eldest son had committed “a serious corporate crime that could have caused mass chaos in the free market economy.” The court was right in handing out severe sentences on the two and other LIG executives, considering their negligence in enhancing transparent corporate management. This is all the more so, given that they frequently reversed testimonies, deleted related data and fabricated financial statements in the course of the probe and the trial.
While it is necessary to create a milieu in which entrepreneurs are respected in our society to rejuvenate the sagging economy and create jobs, illegal acts committed by some large companies incite anti-business sentiments and threaten the very foundation of our free market economy. This, in turn, will result in even conscientious entrepreneurs being criticized all together.
The time has been long overdue for misbehaving industrialists to forgo the privilege of avoiding punishment merely for being thought to have contributed to economic development. Rigorous penalties will have to await those who break the law without fail.
Entrepreneurs, for their part, ought to commit themselves to law-abiding and transparent corporate management.