The factory manager signed a contract by deceiving the management situation... ‘Not guilty’ on appeal

A contract was concluded on the condition of gas payment and gas supply credit… “Repayment was not made”
The court said, “The victim and the defendant were aware of the financial situation… This was not a contract concluded for the defendant’s benefit.”

A factory manager who was put on trial for failing to repay debts by concluding a contract by lying about the business situation was found not guilty in the first trial and also in the appeals court.

On the 1st, Suwon District Court's 6-1st Criminal Division dismissed the prosecution's appeal and upheld the original trial verdict of a man in his 40s on fraud charges at the appeal trial.

Mr. A was accused of deceiving Mr. B, the president of a gas supplier, into paying overdue gas bills on his behalf in 2023. In addition, he was also accused of failing to pay for gas after receiving gas from Mr. B's company.

As a result of the investigation, it was confirmed that Mr. A became delinquent in his gas payment due to worsening factory management, and subsequently signed a new contract with Mr. B's company.

Mr. B's side claimed that at the time of signing the contract, Mr. A promised repayment, emphasizing that his financial situation would soon improve, but did not keep this promise.

The prosecution concluded that Mr. A did not have the intention or ability to repay, given that the factory's management situation was not good at the time and that this contract was concluded while there were large separate debts.

During the trial, Mr. A denied the charges. There was no mention of financial circumstances.

He also refuted that he learned of Mr. B's company through the introduction of an existing gas company, and since the two companies were close friends, he would have been aware of his economic situation. Furthermore, they argued that there may have been other reasons, such as sales performance, that made the contract unreasonable even after knowing this.

The first trial court declared him not guilty. The first trial court said, "Given that the employee who signed the contract stated that he 'heard the entire story from the existing company,' it can be seen that he was well aware of the defendant's economic situation," and added, "It is also unconvincing that the victim would sign a contract while also assuming the debt of the existing company, believing only that 'the financial situation will soon improve.'"

The prosecution, dissatisfied with this, filed an appeal, but the second trial court upheld the original judgment.

The appellate court said, "As payment delinquencies increased, the existing company announced its intention to stop supplying gas and introduced the victim company, and it appears that it had significant involvement in the content and conclusion of the contract. Considering this, this contract was concluded for the benefit of the existing company rather than because the defendant wanted it to be."

He added, “There is considerable scope to believe that the victim company signed a contract based on trust in the existing company, taking the risk of not receiving payment for business performance.”

Lawyer Seongjin Yoon of Daeryun Law Firm, who represented Mr. A, explained, "The actual benefit that Mr. A gained through this contract was 16 million won in unpaid gas fees, and he did not lie about the specific conditions related to the gas contract. Rather, because it was the existing gas supplier who actually benefited from this contract, the court seems to have judged that it is difficult to say that Mr. A committed an act of deception."

Reporter Seohyun Lee (sunshine@kyeonggi.com)

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The factory manager signed a contract by deceiving the management situation... ‘Not guilty’ in the appeal trial (Shortcut)