Seoul District Criminal Court ruled Thursday that the JoongAng Ilbo and its Vice-president Song Pil-ho were not guilty on most of the indictments related to the National Tax Service's allegations they avoided paying W650 million in corporate taxes. The court said the prosecution allegation that the newspaper evaded taxes by claiming to purchase illusionary stock in 1997, was invalidated by the expiration of the statute of limitations.
In addition it stated that the JoongAng Ilbo selling stock for cash was not a taxable transaction as there was no underlying change in asset value.
However, the court ruled the newspaper did fail corporate tax of W35.8 million from interest income of a "slush fund" and failed to deduct W27 million in income tax from cartoonist Kim Sang-tae. Song was therefore sentenced to a one-year prison sentence, suspended for two years and the JoongAng Ilbo was fined W100 million. Management off ice head Lee Jae-hong was also given a one year suspended sentence, for two years, finding him guilty of destroying an accounting book.
(Jong Soon-hong, jsy@chosun.com)
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