The owner who hid a 60 million won loan and took over the cafe...Prosecutors “There is no damage to the transferee”

Accused of causing harm by failing to disclose business loans
Prosecutors “Whether it is a loan or not, is not a key issue in the transaction.”

A man in his 30s who was sent on charges of failing to disclose an existing loan during the transfer process of a cafe was cleared of the charges.

On the 7th of last month, the Busan District Prosecutors' Office decided not to indict Mr. A, who was accused of fraud. Mr. A was accused of intentionally hiding a business loan worth 60 million won received in the name of the café when transferring the café to the complainant, Mr. B, in October 2022.

Mr. B acquired the cafe by transferring Mr. A's business registration number in order to inherit the existing reviews of the delivery app. Afterwards, while looking for a new loan, Mr. B was told that a loan had already been made using Mr. A's business number, so additional loans were not possible. Accordingly, Mr. B requested Mr. A to repay the existing loan in full, but when this was not accepted, he filed a complaint.

Mr. A denied the fraud charges. Although he received a loan, he claimed that it was not for the purpose of passing it on to Mr. B. Mr. A explained, “The loan in question was made before taking over from Mr. B for purposes such as interior decoration of the cafe and operating funds,” and “At the time of signing the contract, we also revealed that it would be difficult to make additional loans in the name of the business.”

The prosecution found that Mr. A was not guilty. The prosecution explained, “Given the fact that the complainant had run the cafe for about two years after signing the contract and looked for a loan, it cannot be concluded that whether or not a loan was available at the time of the transfer contract was a key aspect of the transaction. Since the suspect also repaid the entire loan, it is difficult to say that he intentionally deceived the complainant.”

Attorney Kwon Ji-hye of Daeryun Law Firm, who represented Mr. A, said, “For a crime of fraud to be established, a direct causal relationship must be proven between the deceptive act and the resulting property damage. Since the loan in question was Mr. A’s personal debt, there was no obligation to notify, but Mr. A clearly demonstrated that he notified Mr. B and that no actual property damage occurred.”

Digital Content Team

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The owner who hid a 60 million won loan and handed over the cafe...Prosecutors “No damage to the transferee” (Shortcut)