The head of financially troubled Tong Yang Group, the nation’s 38th largest company, was sentenced to 12 years in prison on Friday for selling financial products he knew would yield little or no returns, while thousands of investors’ livelihoods had depended on them.
Hyun Jae-hyun, 65, was found guilty of ordering Tong Yang affiliates to issue 1.3 billion won ($1.2 million) worth of corporate bonds and commercial papers between February and September of last year, even though he knew the companies would be unable pay off their maturing debts, Seoul Central District Court said in a ruling.
More than 40,000 investors, mostly South Koreans of modest means, bought the bonds and papers. Their plans were to finance the future weddings of their children, retirements and other major life events.
The court said Tong Yang failed to inform investors of the potential risks involved in its products. (Yonhap)
