Former Samyang Foods Chairman Jeon Inchang's Suspended Prison Sentence Finalized for Issuing False Tax Invoices

Seven-Year Legal Battle Concludes After Remand

The Supreme Court has finalized the suspended prison sentence for Jeon Inchang, former chairman of Samyang Foods, who was put on trial for issuing hundreds of millions of won worth of false tax invoices through paper companies. After being indicted in 2019 and undergoing a remand and retrial, the legal proceedings, which lasted about seven years, have come to an end.

Jeon Injang, former chairman of Samyang Foods.

The Supreme Court's Second Division (presiding justice: Oh Kyung-mi) on September 10th confirmed the lower court's ruling in Jeon's appeal trial, upholding a sentence of three years in prison suspended for five years, and a fine of 19.1 billion won for violations including issuing false tax invoices under the Act on the Aggravated Punishment of Specific Crimes.

Jeon was indicted on charges of establishing or acquiring paper companies in the process by which Samyang Foods received raw materials from outside suppliers via its affiliates, in order to transfer affiliate sales, issue and receive tax invoices under the names of these paper companies even when there was no actual transaction, and submit false consolidated invoice reports. In reality, transactions took place among external suppliers, affiliates, and Samyang Foods, but the tax invoices were issued to or received from entities that were not direct parties to the transactions, namely the paper companies.

The court of first instance found Jeon guilty and sentenced him to three years in prison, suspended for five years, and imposed a fine of 19.1 billion won. The appellate court, however, determined that in some cases affiliates merely used the names of the paper companies while conducting actual business, and acquitted him on some charges, reducing the sentence to 18 months in prison suspended for three years and a fine of 650 million won.

However, last year the Supreme Court ruled that the transactions were not permissible "name lending" but rather constituted "name concealment," in which existing business registrations of the paper companies were misused, and sent the case back to the lower court with a guilty verdict. The court, upon remand, also found the previously acquitted portions to be guilty and maintained the original sentence of the first trial.

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