SEOUL– The Supreme Court on Thursday struck down the five-year prison term handed down by an appellate court for a former head of scandal-ridden biotech firm SillaJen on breach of trust charges.
The top court sent the case back to the Seoul High Court for retrial, saying the losses the company suffered from an arrangement that former SillaJen head Moon Eun-Sang set up through the issuance of warrant-linked bonds far exceed the 1.05 billion won (US$808,000) the appellate court recognized.
Moon was charged with breach of duty and capital market act violations for taking illegal profits through an intricate financing scheme involving SillaJen.
He allegedly borrowed 35 billion won from a local financial investment firm via a shell company to buy SillaJen’s warrant-linked bonds. The money thus won by SillaJen was loaned back to the shell company, earning him illegal profits of 191.8 billion won.
A district court initially recognized all 35 billion won as the loss the company suffered from the arrangement, but the appellate court in February reduced the size to 1.05 billion won.
Overturning the appellate ruling, the Supreme Court noted that all 35 billion won should be seen as a loss because the proceeds SillaJen earned through bond issuance did not go into the company.
The state bourse operator is expected to review whether to delist SillaJen from the KOSDAQ following a six-month grace period given to the firm in mid-February to improve its business practices.
Trading of SillaJen stocks has been suspended since May 2020 after Moon and other former and current company officials were accused of embezzlement and dereliction of duty.
After its market debut on Dec. 6, 2016, shares of SillaJen rallied to over 150,000 won in late 2017 before plunging to the 12,000 won level ahead of the trading ban, lower than its IPO price of 15,000 won.
Source: Yonhap News Agency