Hanwha’s Kim ordered to pay compensation

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Hanwha’s Kim ordered to pay compensation

Seoul Central District Court yesterday ordered Kim Seung-youn, the troubled Hanwha Group chairman, to pay more than 8.9 billion won ($ 8.4 million) in compensation to the group’s shareholders in a civil lawsuit.

The ruling puts further pressure on the business tycoon, who was earlier convicted on a separate embezzlement charge.

The plaintiffs - two minor shareholders and the organization Solidarity for Economic Reform - accused Kim and Hanwha’s top executives of selling Hanwha S&C and Dongil Petroleum, held by a Hanwha subsidiary, to his children and relatives at a less-than-market value.

In the criminal trial, however, the 61-year-old chairman was acquitted.

The court explained that one can be held accountable for compensation even if a criminal trial acquitted the charged person.

“Proving guilt in a civil lawsuit is different than in a criminal trial. Acquittal in criminal court doesn’t necessarily mean that one can walk free in a civil lawsuit,” the Seoul Central District Court said. “We have sound evidence to believe that Kim ordered the company to sell subsidiary firms at cheaper prices, which caused substantial damage to the company and shareholders.”

The accused top executives were not held liable for compensation in the civil lawsuit due to lack of evidence proving their role in causing financial damage.

In a separate case, the Supreme Court in September ordered a lower court to review its conviction of Kim for embezzlement and breach of trust.

Kim was charged with misappropriating corporate funds to pay back debts on companies he was running under borrowed names, incurring hundreds of billions of won in losses for Hanwha Group.

A Seoul district court initially sentenced him to a four-year jail term. However, the Seoul High Court reduced the sentence to three years in April on the grounds that he tried to recover losses with his own money.

BY PARK EUN-JEE [ejpark@joongang.co.kr]

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