'Unfair Asset Management' at Sejong University Foundation... Prosecutors Dismiss Charges

Sejong University campus view. / Photo by Sejong University

[Asia Economy Reporter Lee Jung-yoon] The Ministry of Education's request for investigation into the executives of Sejong University’s school corporation for negligence in managing income-generating properties, which allegedly caused losses to the corporation, has been dismissed by the prosecution.

On the 18th, according to the prosecution, the Seoul Eastern District Prosecutors' Office Criminal Division 6 (Chief Prosecutor Kim Nam-hoon) decided on December 22 last year to not indict four executives of the school corporation Daeyang Academy, who had been referred for investigation on charges of breach of trust in the course of business, citing 'no charges.'

In June last year, the Ministry of Education conducted a comprehensive audit of Sejong University and Daeyang Academy and determined that although Daeyang Academy owned land and buildings in Chungmuro, Jung-gu, Seoul, it failed to achieve the minimum statutory rate of return from the 2014 fiscal year through the 2018 fiscal year. Furthermore, it concluded that by leasing the income-generating basic property to a hotel site operated by a director within the corporation under a low monthly rent contract, Daeyang Academy received 260 million KRW less than the statutory rate of return standard from April 2017 to May 2019, and referred the case to the prosecution for investigation.

Subsequently, as a follow-up to the audit, the Ministry of Education held all 11 executives of Daeyang Academy accountable and requested the cancellation of their appointment approvals. This is in accordance with the Private School Act, which requires school corporations to generate annual returns exceeding the statutory rate of return on income-generating basic properties. After about eight months of hearings, two individuals, including former Minister of Foreign Affairs and Trade Yoo Myung-hwan, were disqualified from serving as corporate executives earlier this month.

Sejong University views the dismissal of charges as evidence that the cancellation of executive approvals was unjust and plans to file an administrative lawsuit. A Sejong University official stated, "We will correct the Ministry of Education’s unfair decision through legal procedures."

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