Korean court overturns Hanwha chairman’s three-year prison term; The business tycoon had been convicted of using Hanwha affiliates to “unfairly support” ailing companies he owned under assumed names, causing losses to South Korea’s 10th largest conglomerate

September 26, 2013 Leave a comment

Korean court overturns Hanwha chairman’s three-year prison term

12:14am EDT

SEOUL (Reuters) – South Korea’s supreme court has overturned a three-year prison sentence against Hanwha Group Chairman Kim Seung-youn for breach of trust and other charges, sending the case back to a lower court. Shares in Hanwha Corp (000880.KS: Quote, Profile,Research, Stock Buzz) rose 1.5 percent after the decision on Thursday to a 19-month high, versus a flat benchmark index .KS11. The business tycoon had been convicted of using Hanwha affiliates to “unfairly support” ailing companies he owned under assumed names, causing losses to South Korea’s 10th largest conglomerate.In April, the court of appeal reduced his sentence to three years from the four imposed in August last year.

The supreme court agreed that Kim was responsible for using group affiliates to support other companies, but asked the appeals court to verify whether Kim actually caused losses, showed a supreme court statement released after the decision.

A spokesman for Hanwha Corp declined to comment.

The 61-year-old Kim was imprisoned after the first ruling but released earlier this year as his sentence was suspended because of poor health.

Kim, who arrived at the appeals court in April in an ambulance, did not appear at the supreme court on Thursday.

The authorities have recently been imposing harsher punishment on corrupt business tycoons. In the past, courts were lenient toward the tycoons of family-owned conglomerates, stirring public dissatisfaction.

In 2007, Kim received a suspended prison sentence for beating karaoke bar workers he believed had assaulted his son, but was granted a presidential pardon the next year.

Hanwha Group has 49 units involved in explosives, chemicals, solar energy, insurance, construction and department stores.

Thursday’s ruling comes a day before an appeals court rules on Chey Tae-won, chairman of the third-largest conglomerate, SK Group, who has been serving a 4-year prison sentence since January for embezzlement.

Filed under Investing Process, Macro Trends

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