Controversial Breach of Trust Case Referred Again to the Prosecution Investigation Deliberation Committee

Baek Woon-gyu Faces Trial for Breach of Duty
Second Case After Kang Nam-hoon in 2018
If Prosecution Supported, Blue House Also Faces Accountability
Kim Oh-soo and Supreme Prosecutors' Office May Face Backlash

[Image source=Yonhap News]

[Asia Economy Reporter Kim Hyung-min] The crime of breach of trust, which has been controversial in the business and legal communities due to its ambiguous scope and standards, is once again being put under the scrutiny of external experts.

According to the legal community on the 1st, the Supreme Prosecutors' Office is expected to form a special committee of the Prosecutorial Investigation Deliberation Committee as early as today to review the ‘breach of trust instigation’ charges against former Minister of Trade, Industry and Energy Baek Woon-gyu, and to set a schedule. Prosecutor General Kim Oh-soo approved the Daejeon District Prosecutors' Office to indict three key suspects on charges of abuse of power related to allegations of economic manipulation of the Wolseong Nuclear Power Plant Unit 1, while leaving the differing opinions on former Minister Baek’s breach of trust instigation charges to the judgment of the Prosecutorial Investigation Deliberation Committee.

This is the second time the deliberation committee is reviewing breach of trust-related charges. Previously, on September 3, 2018, the committee reviewed breach of trust charges against former Home&Shopping CEO Kang Nam-hoon, who was investigated by the Central District Prosecutors' Office and Southern District Prosecutors' Office for ‘recruitment corruption’ allegations. At that time, the committee concluded that Kang was not guilty of breach of trust and recommended indictment only on obstruction of business charges. A lawyer familiar with breach of trust cases commented, "In the case of former Minister Baek, the scale, content, and impact after indictment are much larger than Kang’s case, so the deliberation may take longer."

Former Minister Baek is accused of instructing Jeong Jae-hoon, President of Korea Hydro & Nuclear Power (KHNP), to manipulate the economic evaluation results of Wolseong Unit 1 and submit the manipulated results to the KHNP board in June 2018 to obtain approval for its closure. Subsequently, Wolseong Unit 1 was shut down early, causing KHNP approximately 148.1 billion won in losses. KHNP’s stock price also fell, resulting in significant losses for shareholders. These shareholders include private investors holding about 40% of the shares of Korea Electric Power Corporation (KEPCO), KHNP’s parent company. The Daejeon District Prosecutors' Office investigation team regarded this as constituting ‘breach of trust instigation.’ The key party suffering the loss in the breach of trust framework was seen as the government, which did not compensate KHNP’s losses.

If the deliberation committee supports indictment, the government’s accountability will be unavoidable. In the legal community, it is generally accepted that breach of trust holds the highest decision-maker responsible. Therefore, former Minister Baek’s breach of trust implies that the Blue House (Cheong Wa Dae) is also responsible. This could be interpreted as allowing shareholders to file civil lawsuits against President Moon Jae-in and others. Furthermore, this precedent could be applied to similar cases involving other public enterprises related to the government, potentially leading to a flood of lawsuits against the government.

If an indictment recommendation is issued, the Supreme Prosecutors' Office and Prosecutor General Kim, who have so far not approved indictments, will face backlash. During the confirmation hearing, Kim stated, "I understand there are concerns that it is inappropriate for the deliberation committee to judge complex cases in one day and that it could be abused to delay investigations," and added, "We will review improvement measures."

This content was produced with the assistance of AI translation services.