November 21, 2024

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 [THE INVESTOR] A recent ruling by a South Korean lower court that acquitted the founder of Nexon of bribery charges involving a former senior prosecutor is further eroding the major game firm’s public image, which has been plunging since the scandal erupted early this year.

The Seoul Central District Court on Dec. 13 said that Nexon founder Kim Jung-ju was found not guilty of providing some 953 million won (US$808,000) worth of bribes in stocks, cash and spendable goods to former senior prosecutor Jin Kyung-joon from 2005 to 2014.

 

Nexon founder and NXC Chairman Kim Jung-ju

The prosecution had indicted Kim on charges of providing Jin, an old college friend, with 425 million won to purchase some 10,000 then-unlisted shares of Nexon in 2005. After Nexon went public in Tokyo in 2006, Jin sold his stocks to amass profits of more than 12 billion won in 2015.

Kim, the chairman of Nexon’s holding company NXC, was also charged with passing on some 49.5 million won in car rental and maintenance fees and around 50 million won in personal travel expenses to Jin and his family. Jin was also accused of hiding his dubious asset acquisitions from state authorities.

According to the court, the Nexon founder had described Jin as a “close friend,” and acknowledged that he provided money to Jin on grounds that the prosecutor “could use his position to help him in future legal cases.”

Nonetheless, the court found both not guilty, stating there was insufficient evidence to prove that Jin peddled influence for Kim or provided him other favors in exchange for the money he had received.

The 49-year-old former prosecutor was convicted only of receiving separate bribes from Suh Young-won, the CEO of Hanjin Transportation, and sentenced to four years in prison -- a significantly lighter sentence than the 12-year jail term initially pushed for by the prosecution.

The prosecution has officially announced plans to appeal the court’s decision.

The district court’s ruling sparked fierce protests among local citizens, civic groups and political circles who raised questions over the Korean legal system as a whole.

“We’re talking about a whopping 13 billion won, yet this is not considered a compensatory exchange?” wrote one online commentator. “A non-guilty ruling for an obvious case of bribery. Our legal system is rotting,” another person wrote.

Local civic group Spec Watch, known in Korean as the Center for Speculative Capital Watch, released a statement condemning the district court’s ruling. The group had been the first to report Jin to prosecutors back in April, kick-starting an official investigation.

“Nexon chief Kim Jung-joo confessed that he provided prosecutor Jin with financial kickbacks to solicit favors. Yet the judge ruled that there was insufficient evidence to prove they were in a compensatory relationship,” Spec Watch said.

“This shows how Korea’s legal system is a corrupt body that protects crony conglomerates, said the civic group, which also called for the judge in charge to be fired immediately and investigated by the prosecution.

The Democratic Party of Korea spokesperson Park Kyung-mi told reporters that the court had adopted a narrow interpretation of the bribery charges as prosecutors failed to prove that the transactions were explicitly linked to peddling influence or favors.

“Prosecutors will be unable to avoid criticisms that they are intentionally protecting their own,” Park said, pointing to public uproar about the seemingly preferential treatment for the disgraced ex-presidential aide and former prosecutor Woo Byung-woo, and now for Jin Kyung-joon.

Nexon has remained silent over the court’s decision regarding its founder. A company spokesperson declined to provide comment, as more trials are slated to take place.

Following his indictment in July this year, Kim stepped down from Nexon’s board. He has continued in his post as chairman of Nexon’s holding company NXC.

By Sohn Ji-young/The Korea Herald (jys@heraldcorp.com)