After the public backlash over a court’s decision to allow a disgraced chaebol owner to pay off a 25.4 billion won ($23.5 million) fine by spending 49 days in a prison labor house making tofu

A day’s work for 500 million won?

Mar 26,2014

A former corporate kingpin who used to run the largest business group in Gwangju and South Jeolla before the conglomerate fell apart in 2010 returned to Korea over the weekend to comply with a local court order to work off his massive fines. The former chairman fled to New Zealand to dodge hefty fines after he was convicted of embezzlement and tax evasion.
But what’s extraordinary about the situation is that Huh Jae-ho, former chairman of the now-disbanded Daeju Group, is deducted 500 million won ($463,671) in fines for a day’s labor at the prison.
Under a grace period over the weekend, he has already had 1 billion won deducted for two days in prison, without doing anything. Because he is advanced in years – Huh is 72 – he will also be given physically undemanding work, which is hardly worth 500 million won.
Huh was indicted in 2007 for evading 50 billion won in corporate taxes and embezzling corporate funds worth 10 billion won. He left the country during the second trial in 2010. In 2011, the Supreme Court delivered its final ruling, sentencing him to two years and six months in jail, as well as an additional fine of 25.4 billion won.
The lower appellate court gave Huh the option to work off his fine, setting the value at 500 million won for a day’s work. Huh returned home and headed straight to prison to pay off his dues. It will only take him 50 days to pay off the full 25.4 billion won fine.
Under Korean criminal law, terms at the prison labor house are set anywhere between one day and three years. It is up to the individual court to set the cost of labor. For common inmates, a day’s work is set between 50,000 won and 100,000 won. But strangely, during the second trial, the court in Gwangju came up with a historic figure for a day’s labor, worth 5,000 to 10,000 times the normal rate.
The decision naturally raised uproar over favoritism toward a regional business tycoon who wielded enormous power in Gwangju. The ruling was also delivered by a judge whose entire bench career had been limited to Gwangju.
But the case is no local affair, and it has the potential to damage the reputation of the judiciary branch. Even if judiciary decisions are up to the court judge, they must be within the realm of common sense and comprehension. To prevent similar cases, the judiciary should come up with general guidelines on labor cost and sentence terms.

 

W500 million a day Daeju judge in the hot seat

Mar 26,2014

Jang Byung-woo

After the public backlash over a court’s decision to allow a disgraced chaebol owner to pay off a 25.4 billion won ($23.5 million) fine by spending 49 days in a prison labor house making tofu, the Supreme Court said yesterday that it began reviewing the prison labor system to fix problems.

And it turned out that the judge at an appellate court in Gwangju who gave the controversial ruling, Jang Byung-woo, 60, has been stationed in the city for 29 years and may have had improper connections with the Gwangju-based chaebol at the center of the case, the Daeju Group.

The 72-year-old former Daeju chairman, Huh Jae-ho, was arrested Saturday upon his arrival from New Zealand and sent straight to a prison labor house.

Huh spent four years overseas in an attempt to avoid paying the 25.4 billion won fine for tax evasion and embezzlement.

In an appeals ruling in 2010, Judge Jang handed down a two and a half year prison term, suspended for four years, and ordered Huh to pay a 25.4 billion won fine.

Then the court set the value of Huh’s labor at 500 million won per day.

“We took into consideration that he paid a part of 81.8 billion won tax imposed by the authorities and tried to save his company with his own wealth, as well as his contribution to the local economy,” said the judge in his verdict.

A court has the authority to determine the amount of daily labor for a convict by taking into consideration the scale of the fine and the defendant’s age.

Jang’s valuing Huh’s daily labor at 500 million won was unprecedented. The value of daily forced labor for business tycoons convicted of white collar crimes does not usually exceed 10 million won.

The minimum amount a court can set for daily labor is 50,000 won.

Under current law, a convict ordered to pay a fine by a court must do so within 30 days or complete mandatory labor at a prison for up to three years.

According to the Gwangju Correctional Institute, Huh is spending eight hours a day making paper shopping bags, tofu or furniture.

Jang, who now heads the Gwangju District Court, was reported by the JoongAng Ilbo yesterday as saying that it was not appropriate for a judge to discuss a legal case that has already been settled.

Politicians jumped on the case yesterday, lamenting the judicial branch’s “lack of common sense.”

“The court’s decision [on the value of Huh’s labor] is full of nonsense,” said the Democratic Party’s Woo Won-shik during a party leadership meeting yesterday at the National Assembly. “It is beyond deplorable that a person who embezzles an amount of money not even imaginable by common people can be freed after 49 days in the work house.”

Saenuri floor leader Choi Kyung-hwan also expressed regret over the case yesterday, saying chaebol owners who committed fraud should be held to stricter account.

The now-disbanded Daeju Group was once the country’s 52th-largest company by assets with 15 subsidiaries, contributing to the local economies of Gwangju and South Jeolla, where the company was headquartered.

The conglomerate fell apart in 2010 when Daeju Construction went bankrupt.

BY KANG JIN-KYU [jkkang2@joongang.co.kr]