Director A of Company X holds 100% of the company's shares as a single shareholder. Company X was established with a capital of KRW 10 million.
A, thinking that the company would make a good impression on its business partners if it appeared larger, planned to increase X's capital to KRW 500 million and carried out a capital increase. A borrowed KRW 490 million from a loan shark to pay for the stock increase and, immediately after the capital increase procedure was completed, withdrew the KRW 490 million from the company's account and repaid the loan shark.
The accountant B of Company X, who had not been on good terms with A, reported A to the police after leaving the company.
In this case, A is punished for the crimes of false stock payment, false entry of official electronic records, and conducting false entry of official electronic records under the Commercial Act.
A did not actually make a payment of KRW 490 million for the new share subscription to X but pretended to have done so. On the surface, Company X's capital seemed to have increased from KRW 10 million to KRW 500 million, as recorded in the corporate registry, but in reality, Company X's capital did not increase.
Such an act of falsely claiming to have paid for stocks is called false stock payment. This is punishable under Article 628 of the Commercial Act.
| Commercial Act Article 628 (Crimes of Disguised Payment) (1) If a person set forth in Article 622 (1) has committed an act of disguising a payment for the subscription price or the fulfillment of an investment in kind, he/she shall be punished by imprisonment with labor for not more than five years or by a fine not exceeding 15 million won. (2) The provisions of paragraph (1) shall also apply to a person who has consented to or has mediated an act mentioned in paragraph (1). |
Company X's actual capital is KRW 10 million, but it is recorded as KRW 500 million in the corporate registry. The corporate registry is managed electronically by the court and is considered an "official electronic record." Since the false entry of KRW 500 million instead of KRW 10 million was made in the official electronic record, the corporate registry, it constitutes a crime of false entry of official electronic records. Furthermore, by making this falsely recorded official electronic record accessible to others, it constitutes the crime of conducting false entry of official electronic records. It is called 'Untrue Entry in Officially Authenticated Original Deed'
| Criminal Act Article 228 (Untrue Entry in Officially Authenticated Original Deed) (1) Any person who makes a false report to a public official and has that official enter record any false fact in the authentic deed or identical special media records, such as electronic records, shall be punished by imprisonment with labor for not more than five years or a fine not exceeding ten million won. |
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