Today's Lee Young Hearing, Terten and VC CEO Faces Intense Scrutiny Over Various Allegations

Multiple 'Self-Contracting' of Software by Government-Affiliated Agencies
Assemblyman Jeong Tae-ho Focuses on Suspicious Transactions of iAllianceInve
Verification of Commitment to Small Business Policies Including 50 Trillion Won Fiscal Pledge

[Image source=Yonhap News]

[Asia Economy Reporter Kim Bo-kyung] At the confirmation hearing for Lee Young, the nominee for Minister of SMEs and Startups, scheduled for today (the 11th), various allegations surrounding the companies founded by the nominee are expected to emerge as key issues. There will also likely be continued scrutiny regarding small business policies, including the rollback of the 50 trillion won pledge for small business loss compensation.

The National Assembly’s Industry, Trade, Energy, SMEs and Startups Committee will hold the confirmation hearing for the nominee starting at 10 a.m. today. The Democratic Party, now in opposition, has prepared questions to verify the nominee’s morality and qualifications, as well as the direction for fulfilling the new government’s pledges.

Attention is first focused on the investment and transaction practices of the venture capital (VC) firm Y Alliance Investment, which Lee established just before entering the National Assembly. Some lawmakers have raised concerns that the company invested in profit-guaranteed firms such as overseas company Nanox, contrary to its original purpose of nurturing young startups. Additionally, the company was pointed out for receiving three corrective orders from the Ministry of SMEs and Startups due to a lack of investment over a long period, in violation of the Venture Investment Promotion Act.

Democratic Party lawmaker Jung Tae-ho plans to raise suspicions about the suspicious process of stock disposal by this company. Y Alliance Investment, which is virtually inactive, transferred all its shares to the second-largest shareholder (Sanha Industry), and the company decided to liquidate about a month after disposing of the shares. A staff member from Jung’s office said, "We requested detailed stock disposal records from the nominee’s side regarding Y Alliance Investment, but they did not comply with the submission of materials."

Furthermore, the Democratic Party intends to raise a conflict of interest allegation that Lee, during his tenure as CEO of IT security company Terten, 'self-awarded' contracts from government-affiliated agencies under the ministries where he held public office.

In 2016, when Lee concurrently served as CEO of Terten and as an operating committee member of the Korea SMEs and Startups Agency, Terten supplied screen information leakage prevention software worth 12.1 million won to the agency. In 2017, while he was an advisory member of the Korean Intellectual Property Office, Terten delivered capture prevention software worth 86 million won to the office. In 2018, Terten secured a contract for security software worth 23.7 million won from the Korea Small Business Distribution Center.

[Image source=Yonhap News]

Democratic Party lawmaker Kim Seong-hwan plans to raise suspicions of 'self-plagiarism' after analyzing the doctoral dissertation Lee obtained this year, finding that nearly half of the paper was copied from a paper the nominee himself submitted to an international journal last year.

According to Kim, the similarity rate of Lee’s KAIST doctoral dissertation (titled: "Screen Capture Prevention System Based on OS-Level System Control Technology and Artificial Intelligence Technology") to other academic materials is 44%. Of the 27 pages of the dissertation, 13 pages were similar to existing papers. A staff member from Kim’s office said, "If the similarity exceeds 20%, it is strongly suspected to be plagiarism."

The prior research showing similarity to the nominee’s doctoral dissertation was a paper the nominee himself authored as the main author and submitted last year to the English journal of the Korean Internet Information Society (titled: "Latest Technologies for Screen Capture Prevention"). Kim’s office pointed out, "Reusing one’s own research without separate source citation constitutes self-plagiarism (duplicate publication), which is a serious violation of research ethics."

Most opposition lawmakers, including Democratic Party lawmaker Hwang Un-ha, commonly criticize the fact that the new government’s pledge to secure 50 trillion won in fiscal funds for full loss compensation for small business owners and self-employed individuals has effectively been abandoned.

Democratic Party lawmaker Hong Jeong-min is expected to raise issues regarding the government’s 'Rent Sharing System,' which compensates small business owners for rent. While agreeing with the purpose of the system, she plans to emphasize that if it is not thoroughly planned and executed, side effects such as 'moral hazard' could occur.

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