Konkuk University Loses Lawsuit Against Ministry of Education Sanctions Over 12 Billion Won 'Optimus Investment' Case

[Image source=Yonhap News]

[Asia Economy Reporter Bae Kyunghwan] Konkuk University Foundation, which invested 12 billion KRW in Optimus Asset Management, faced disciplinary action from the Ministry of Education and lost the lawsuit it filed.

On the 23rd, the Administrative Court of Seoul, Administrative Division 3 (Presiding Judge Yoo Hwanwoo) ruled against Konkuk University Foundation in the lawsuit it filed against the Ministry of Education, requesting the cancellation of the disciplinary measures taken following the on-site investigation results.

Previously, Konkuk University invested 12 billion KRW, part of the rental deposit of its profit-making business entity The Classic 500, into Optimus Asset Management. According to Article 28 of the Private School Act, "When a school foundation intends to sell, donate, exchange, change the use of, or provide as collateral its basic property, it must obtain approval from the Ministry of Education." The investment was made without board resolution or Ministry of Education approval for the change of use of the basic property for profit.

After the Optimus fund fraud scandal surfaced and Konkuk University's investment became controversial, the Ministry of Education conducted an on-site investigation and in November last year requested an investigation into Chairman Yoo Ja-eun of Konkuk University Foundation and former CEO Choi Jong-moon of The Classic 500 on charges of breach of trust. Additionally, the Ministry pursued procedures to revoke the approval of appointment for Chairman Yoo and the foundation’s auditor, issued warnings to five directors, demanded disciplinary action against two former and current executives of the foundation, and severe disciplinary measures against four individuals including the CEO of The Classic 500. The Ministry also required Konkuk University to implement measures to prevent recurrence.

Meanwhile, Konkuk University requested the Ministry of Education to reconsider the disciplinary measures based on the on-site investigation results, but when the request was denied, it filed an administrative lawsuit in February this year and also applied for a suspension of execution in March.

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