80 Billion Won Corporate Fund Embezzlement Case Sparks Controversy Over Police Investigation Delay

Evidence submitted to the police by the accusers.

[Asia Economy Honam Reporting Headquarters Reporter Kim Chunsu] Controversy has arisen over allegations that the investigation proceeded while ignoring the evidence submitted by the accusers in a case reporting embezzlement of corporate funds worth tens of billions of won.

According to the accusers on the 2nd, they submitted a complaint to the Gwangju District Prosecutors' Office around February 2020, accusing former CEO A of a trading company and four executives and employees of embezzling corporate funds worth around 8 billion won.

It is alleged that A and others colluded with a machine manufacturing company and embezzled loan funds obtained from commercial banks using a guarantee certificate from the Korea Technology Finance Corporation.

The accusers claim that A used the guarantee certificate from the Korea Technology Finance Corporation to obtain loans from commercial banks and handed them over to the machine manufacturing company, which then siphoned off the machine payment by repeatedly depositing the money into A’s bank account.

Reviewing the materials submitted to the police, 28 billion won was borrowed from commercial banks with a guarantee from the Korea Technology Finance Corporation, and 10% of that amount, 2.8 billion won, was deposited on June 12, 2018, from an account presumed to be A’s personal account into an account suspected to belong to Mr. C of the machine manufacturing company, and was immediately deposited back into A’s account as a loan.

Also, on August 29, 2018, 337 million won was deposited from an account presumed to be owned by A to Mr. B, who then returned 237 million won to A on the same day, deducting 100 million won as a loan. On December 17 of the same year, A deposited 748 million won to Mr. B, and on the same day, 318 million won, after deducting 400 million won as a loan, was deposited back into an account presumed to be A’s. Such transactions between the two continued for over a year until June 2019.

The accusers argue that the transaction details between A and B are the most accurate evidence of embezzlement of falsely obtained loans from commercial banks using guarantee certificates received from a national fund.

Although they submitted such meaningful materials to the police, they say the police only repeated that the case was 'under investigation' and delayed the process for over a year, and when asked about the reduction or delay of the investigation by the responsible police officers, they only responded that it was 'being investigated.'

In particular, since April last year, the accusers repeatedly requested the police to prioritize the investigation of the case, stating that "corporate funds are being embezzled by using corporate cards and vehicles, and by payback of investment funds and machine payments (Korea Technology Finance Corporation)," and that "A and others are freely misappropriating national funds and destroying evidence, so this case should be investigated first."

However, when the Naju Police transferred the accused to the prosecution in March this year on charges of indictment, it was confirmed that the embezzlement of 1.2 billion won in national subsidies was omitted, which infuriated the accusers.

Regarding this, the police judged that the case of national subsidies was different in nature from general embezzlement cases, handled it separately, and concluded that in order to detain and transfer the accused, they had to first investigate the Act on the Aggravated Punishment of Specific Economic Crimes involving about 5 billion won, and proceeded with the investigation accordingly.

The accusers’ lawyer said, "From the beginning of the investigation, we repeatedly requested a prompt investigation into the Korea Technology Finance Corporation, but the responsible police only pretended by saying 'Okay, under investigation,' and the report did not include that content when transferring to the prosecution," adding, "After conducting the investigation for over a year, there are many suspicions about what was investigated, why the progress of the accused’s investigation is slow, and why the accusers were not informed when the prosecution requested a 'reinvestigation.'"

Currently, the case has been transferred to the Anti-Corruption Investigation Unit of the Jeonnam Provincial Police Agency and is under investigation, and the Investigation Review Office is checking whether there were any investigation delays or errors.

A police official said, "We will thoroughly investigate based on principles to ensure that no one is unfairly treated," and added, "We will also verify whether the responsible police intentionally delayed the investigation."

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