SPC Chairman Hur indicted on breach of trust charges

SEOUL– Prosecutors on Friday indicted Hur Young-in, the chair of the nation’s largest bakery chain, SPC Group, on breach of trust charges for underselling stocks held by group affiliates in a suspected attempt to evade the gift tax.

Hur was accused of selling stocks of Mildawon, a grain company wholly owned by his family, at 255 won (US$0.19) per share in December 2012, far cheaper than the estimated 2011 price of 1,180 won or their 2008 acquisition price of 3,038 won.

The chairman allegedly dumped Mildawon shares held by other SPC affiliates, including Paris Croissant and Shany, in a suspected attempt to evade the gift tax imposed when business contracts are awarded between affiliates of the same group.

Mildawon was in charge of producing and supplying flour to SPC affiliates via another SPC subsidiary, Samlip, a structure under which Hur would have been slapped with a transfer tax of 7.4 billion won over the following 10 years if the stock sales had not taken place.

Prosecutors suspect the stock dealings inflicted damage of 5.81 billion won on Shany and 12.16 billion won on Paris Croissant, while giving Samlip proceeds of 17.97 billion won.

The investigation by the Seoul Central District Prosecutors Office was launched after minor shareholders of Shany filed a complaint against the owning family of SPC in October 2020.

Prosecutors were also continuing their investigation into separate allegations that several affiliates of SPC helped Samlip earn 41.4 billion won of profits between 2011 and 2019 by unfairly awarding contracts to it at the intervention of Hur and his family.

Responding to the indictment, an SPC official countered the stock sales were carried out after assessing the stock value “in compliance with legal procedures and standards via an outside accounting firm.”

“(SPC) will iron out misunderstanding by proactively explaining itself in future trial proceedings,” the official said.

Source: Yonhap News Agency

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