The founder and former CEO of South Korean owner Cido Shipping, Hyuk Kwon, has been cleared of tax evasion.
A notice from the Seoul central district prosecutor's office shows Kwon was declared innocent at Seoul High Court.
This overturned a judgement of the Court of First Instance.
Kwon had been sentenced to eight months in prison, suspended for two years, the notice said.
Korean reports in 2013 said Kwon was also hit with a KRW 234bn ($215.74m) fine, while Cido had been saddled with a further penalty of KRW 26.5bn.
The court case related to the years 2006 to 2009.
Kwon and Cido Car Carrier have also appealed in the commercial court against the imposition of tax on grounds that neither is tax resident in South Korea.
This appeal is presently pending.
Cido was founded in 1990 by Kwon and is now managed from Japan in terms of finance and management, in Hong Kong regarding strategy and operations, and from South Korea in relation to technical management.
South Korean authorities alleged that Kwon failed to pay corporate and income tax between 2006 and 2009.
Property ownership at issue
Kwon maintained at the time a property portfolio in South Korea and, on the basis of the time he spent in Korea between 2006 and 2009, the South Korean authorities alleged that his income from the property portfolio and shipping activities was derived in South Korea such that he was liable to pay tax there.
In the course of the proceedings brought against Kwon in 2011, the National Tax Service (NTS) of South Korea alleged that Cido Car Carrier, based in Hong Kong, is liable to pay tax in South Korea on the basis of the time Kwon, as the owner, spent in South Korea.
As a result, NTS demanded from the company payment of corporation tax for the years 2006 to 2009.
It disputed this, but the Court of First Instance found that Cido Car Carrier is tax resident in South Korea and should pay tax.
Cido's lawyers told TradeWinds that its appeal is expected to succeed.
Kwon was originally a ship’s captain and developed an expertise in pure car carriers.
With good connections with major Japanese charterers he was able to grow his fleet and then diversify into other kinds of vessels – containerships, tankers and dry bulk.
Cido has a fleet of around 100 vessels under its ownership or control.
