Key Takeaways
- The Supreme Court has restored a fraud case against Moon June Seok, the former Chief Financial Officer of Daechang Seat Automotive Ltd, in connection with alleged Rs.10 crore financial fraud.
- The case was quashed by the Karnataka High Court, but the Supreme Court has now restored the proceedings against Seok.
- The Supreme Court emphasized the importance of upholding investor confidence and protecting the investments of foreign investors.
New Delhi: The Supreme Court has set aside a Karnataka High Court order that quashed criminal proceedings against Moon June Seok, the former Chief Financial Officer of Daechang Seat Automotive Ltd, a South Korean company that manufactures car seat frames for KIA Motors.
The top court has directed that Seok must face trial in connection with an alleged Rs.10 crore financial fraud.
A Bench comprising Justice Sanjay Karol and Justice Ahsanuddin Amanullah, in its April 8 judgement, allowed an appeal filed by Daechang Seat Automotive challenging the High Court’s decision.
The Supreme Court held that Seok’s own statement indicated the possibility that he may have received funds from other accused persons, thus justifying the continuation of the trial.
“At this stage, we are unable to convince ourselves that coming to such a conclusion (of quashing the case) would be just, reasonable, and proper, more so, keeping in view the large amounts of money involved,” the Bench observed.
Emphasising the importance of upholding investor confidence, the court added, “The rule of law has a responsibility to protect the investments of foreign investors while at the same time ensuring that any person accused of mishandling such funds is really and fully protected by the power of the phrase ‘innocent till proven guilty’.”
Seok, along with chartered accountants and financial advisors, is accused of criminal conspiracy and misappropriation of funds in the name of fictitious GST payments amounting to around Rs10 crore.
The FIR in the case was registered in 2022, and a chargesheet was filed following an investigation, after which the trial court took cognisance in 2023.
However, the Karnataka High Court had quashed the proceedings against Seok, observing that there was no prima facie material to implicate him and that his role was limited to forwarding bills to the company’s Managing Director.
“Therefore, without any material evidence collected against the petitioner, the contention that the petitioner has conspired with accused Nos.1 to 4 and misappropriated nearly Rs.10 crores, cannot be acceptable,” the High Court had ruled.
This led the company to move to the Supreme Court, which has now restored the case.
Senior Advocate Sidharth Luthra appeared for Hyeoksoo Son, the authorised representative of Daechang Seat Automotive, while Senior Advocate Rajiv Shakdher represented the respondent-accused.
