Lee Woong-yeol, 63, former chairman of Kolon Group, was fined in the first trial for holding inherited shares under borrowed names.
The Seoul Central District Court on July 18 fined Lee 300 million won for violating laws on the capital market and the financial investment industry.
"Lee violated regulations set by institutions that will make the capital market, the real market and the financial market work transparently and smoothly," the court said, explaining that proper punishment is needed.
Lee is accused of failing to report the fact that he holds 340,000 Kolon Life Science shares, which his father, the late Kolon Honorary Chairman Lee Dong-chan, left under borrowed names for his children, under borrowed names. Lee, a major shareholder, is obliged to report the status of his stock holdings to financial authorities.
It was also found that Lee did not include borrowed-name stocks in its own stock for 17 times from 2015 until last year, and did not report changes in ownership due to false reports or sales of part of the shares.
In 2016, he allegedly submitted false data to designate Kolon as a business group that is restricted from cross-shareholding by not including borrowed-name stocks in his own stock holding (in violation of the fair trade law).
He is also suspected of selling 40,000 of his borrowed-name shares from 2015 to 2016 while remaining under borrowed names for purposes such as avoiding capital gains taxes for major shareholders.
