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CJ chairman’s prison term upheld

December 15, 2015
Lee Jae-hyun, the chairman of food and entertainment conglomerate CJ Group, in a wheelchair, is moved into a courtroom at the Seoul High Court, southern Seoul, on Dec. 15, 2015. (Yonhap)

Lee Jae-hyun, the chairman of food and entertainment conglomerate CJ Group, in a wheelchair, is moved into a courtroom at the Seoul High Court, southern Seoul, on Dec. 15, 2015. (Yonhap)

SEOUL (Yonhap) — A Seoul appellate court on Tuesday sentenced the chairman of food and entertainment conglomerate CJ Group to two years and six months in prison for embezzlement, breach of trust and tax evasion.

Chairman Lee Jay-hyun received the jail term in a retrial held three months after the nation’s top court sent the case back to the Seoul High Court for reconsideration.

The court also ordered the chairman to pay 25.2 billion won (US$21.31 million) in fines, upholding a lower court’s decision.

The tycoon, however, was not immediately put behind bars as the court had earlier accepted his request to suspend his imprisonment, citing health concerns. The suspension is to expire on March 21.

Lee, who attended a hearing on a wheel chair, returned to a Seoul hospital where he has been staying since 2013 for treatment.

Lee was indicted in 2013 on suspicions of misappropriating more than 160 billion won in company assets to offshore slush funds and dodging taxes in the process.

“As the chairman of a major conglomerate, Lee committed crimes such as tax evasion, embezzlement and breach of trust in an aim to increase his personal assets,” judge Lee Won-hyung said in his ruling.

The ruling is unusual in a country where judges are known for being lenient on powerful tycoons. The sentence is seen as an effort by the judiciary to break away from the long practice of giving light punishment to owners of family-run conglomerates, or chaebol, citing their importance to the national economy.

The judge further said it was his intention to clearly make sure that “even chaebol who commit corporate crimes or evade tax for personal benefits or ignore law and order will be severely punished.”

Following the verdict, CJ said it plans to file an appeal with the Supreme Court again.

“The group is in total chaos as a prison term was not expected,” said a CJ worker, requesting anonymity.

Lee will be immediately put behind bars starting on March 21 if the Supreme Court rejects Lee’s planned appeal, said a court official.

The tycoon was sentenced to four years in jail and fined 26 billion won by a local court in 2013. In September 2014, an appeals court commuted the jail term to three years. The Supreme Court, however, returned the case to the Seoul High Court in September this year, asking it to reconsider its heavy ruling on Lee’s breach of trust charges.

The top court said he should not be judged with the aggravated charges as the amount of losses caused by Lee’s breach of trust cannot be calculated specifically.

Lee, who has undergone a kidney transplant, claims that he suffers from multiple illnesses such as Charcot-Marie-Tooth disease, high blood pressure, high cholesterol and kidney disease.

Charcot-Marie-Tooth disease is an inherited neurological disease characterized by the slow, progressive degeneration of the muscles in the feet, lower legs and hands.

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