5-year jail term for former SillaJen head

The Supreme Court on Thursday struck down the five-year prison term handed down by an appellate court for a former head of scandal-ridden biotech firm SillaJen on breach of trust charges.

The top court sent the case back to the Seoul High Court for retrial, saying the losses the company suffered from an arrangement that former SillaJen head Moon EunSang set up through the issuance of warrant-linked bonds far exceed the 1.05 billion won ($808,000) the appellate court recognized.

Moon was charged with breach of duty and capital market act violations for taking illegal profits through an intricate financing scheme involving SillaJen. He allegedly borrowed 35 billion won from a local financial investment firm via a shell company to buy SillaJen’s warrant-linked bonds. The money thus won by SillaJen was loaned back to the shell company, earning him illegal profits of 191.8 billion won.

A district court initially recognized all 35 billion won as the loss the company suffered from the arrangement, but the appellate court in February reduced the size to 1.05 billion won.