Seoul: The government has lost a civil appeals case seeking to seize assets allegedly held under a borrowed name by the late businessperson blamed for the 2014 sinking of the Sewol ferry to recover costs related to the disaster, legal officials said Saturday. The Seoul High Court upheld a lower court ruling and rejected the government's request to transfer stocks owned by Kim Hye-kyung, the former head of Korea Pharmaceuticals.

According to Yonhap News Agency, Kim is considered a close aide to Yoo Byung-eun, the former chairman of Semo Group, and is suspected of managing Yoo's hidden assets and slush funds. "Even after reviewing additional evidence submitted in the appeals trial, the factual findings and judgments of the lower court are deemed justified," the appellate court stated in its ruling.

In 2017, the government filed a civil lawsuit against Kim to surrender such assets to cover costs incurred from the Sewol ferry disaster, following the passage of a special law to compensate victims. The total value of the assets the government sought to seize is estimated at around 12 billion won, including 2,000 shares of Chonghaejin Marine Co., the operator of the sunken Sewol ferry.

The government claimed Kim managed various companies and non-listed stocks owned by Yoo, citing testimony from employees at Semo group affiliates. In contrast, Kim had argued she had acquired such assets with her own funds. The lower court had rejected the government's claim, stating it was largely based on "speculation" and "unclear statements."