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SPC chairman Hur Young-in cleared of tax evasion scheme

Published: 12 Dec. 2024, 17:47 Updated: 12 Dec. 2024, 17:47

KIM JU-YEON
[email protected]

SPC Chairman Hur Young-in leaves the Seoul Central District Court in Seocho District, southern Seoul, on Feb. 2 after attending trial for charges of ordering company affiliates to sell their shares of a different affiliate at lower prices to evade gift taxes. He was found not guilty by the lower court. [YONHAP]

Hur Young-in, the chairman of Korea’s largest bakery chain SPC Group, was acquitted of allegedly ordering company affiliates to dump shares to evade gift taxes on Thursday.

The Supreme Court upheld the rulings of the lower and appellate courts that found Hur not guilty of violating the specific economic crimes law. Former SPC Group president Cho Sang-ho and SPC CEO Hwang Jae-bok, who were indicted for the same offenses, were also acquitted.

Hur was charged with ordering group affiliates Paris Croissant and Shany to sell stocks of Mildawon, a flour producer under SPC Group, to SPC Samlip at 255 won (18 cents) per share in December 2012, far lower than the appraisal price of 1,180 won in 2011 and the 2008 acquisition price of 3,038 won. Prosecutors claimed that the appropriate share price was 1,595 won.

Hur’s sons Hur Jin-soo and Hur Hee-soo are major shareholders of SPC Samlip, with 16.27 percent and 11.92 percent stakes, respectively, as of Nov. 20.

Prosecutors contended that Hur made the order to evade gift taxes. They alleged that the stock sale lost Shany 5.81 billion won and Paris Croissant 12.16 billion won while SPC Samlip gained 17.97 billion won in proceeds.

The Seoul Central District Court and Seoul High Court found Hur not guilty as they determined Mildawon’s stock price valuation method to not be illegal, and that unlawful intervention before the stock sale could not be proven, making it difficult to view the sale as an act of breach of trust.

The Supreme Court upheld the lower and appellate courts’ rulings from February and September, respectively.

Hur was granted bail in September after being detained in April on charges that he coerced bakers at SPC company Paris Baguette to quit their labor union. The alleged coercion was tied to the union's criticism of the company's labor practices.

Nationwide boycotts were launched against the bakery chain and SPC Group over the company's handling of a worker’s death in its factory in 2022. Another worker at a Shany facility died in August 2023, less than a year after the group promised to strengthen its safety precautions.

BY KIM JU-YEON [[email protected]]