Overturning a lower court ruling, an appeals court acquitted the head of a major dairy product maker on Wednesday of charges that he evaded taxes worth some 7.3 billion won.

The Seoul High Court, however, fined Hong Won-sik, head of the Namyang Dairy Productions Co., 100 million won for illegitimately holding shares under borrowed names.

The 66-year-old chairman was indicted in January 2014 for trading shares under borrowed names after inheriting them from his late father and founder of the company, Hong Du-yeong, in 2007 to evade taxes. A local court later sentenced him to three years in prison suspended for four years for stashing secret funds via deals involving expensive artwork and dodging taxes in the process.

The appeals court, however, did not accept the prosecutors' claim that Hong received some 5.2 billion won worth of checks from his father and found him not guilty of evading gift taxes. It also acquitted Hong of evading transfer income taxes.

The chairman was only found guilty of not reporting shares he held under borrowed names to the financial authorities.

"The shares were obtained to manage the company, and there was no evidence of (Hong) attempting to manipulate the stock prices (with the shares)," the court said. 

"Currently, all the shares have been returned to the real name accounts, with all necessary taxes paid," it added, explaining the ground for the reduced monetary penalty. (Yonhap)