Ex-Shinhan executives receive suspended terms for embezzlement

Two former executives of the Shinhan Financial Group Co. received suspended prison terms on Wednesday for embezzling a massive amount of company funds, according to court officials.

The Seoul Central District Court sentenced Shin Sang-hoon, former president of the country’s No.4 banking group, to 18 months in prison, suspended for two years, for pocketing 261 million won ($246,458) of company money and illegally taking 200 million won worth of stocks from one of the group’s shareholders, they said.

The court, however, cleared Shin of charges that he extended some 40 billion won worth of illegal loans to his relatives’ firms and pocketed consulting fees worth 1.56 billion won that should have been paid to the group’s honorary chairman, they added.

Lee Baek-soon, former president of Shinhan Bank, the flagship unit of the group, was also sentenced to 18 months in prison, suspended for two years, for taking 500 million won worth of stocks from the same shareholder, officials said.

Lee has also been cleared of charges that he pocketed some 300 million won from Shin’s slush fund, they added.

Prosecutors previously sought a five-year prison term for Shin and a three-year term for Lee.

“The defendants, as the heads of one of the country’s leading financial groups, should have lived up to the high ethical standards and abided by the law,” Judge Seoul Beom-sik said in his ruling. “Instead, the two pocketed company money, violating the financial holding company law and the banking act.”

Judge Seoul, however, took into consideration that Shin and Lee did not actually use the money for personal use.

The banking group was mired in a high-profile internal feud over management control in 2010, which led to the resignation of Lee and Shin as well as the group’s then-chairman Ra Eung-chan. (Yonhap News)