‘Optimus 12 Billion Won Investment’ Konkuk University Corporation Loses Appeal Against Ministry of Education Sanctions

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[Asia Economy Reporter Heo Kyung-jun] Konkuk University Foundation, which invested 12 billion KRW in Optimus Asset Management, filed a lawsuit challenging the disciplinary action by the Ministry of Education but lost again in the appellate court.

On the 22nd, the Seoul High Court Administrative Division 10 (Presiding Judge Seong Su-je) ruled against the plaintiff, the Konkuk University Foundation, in the lawsuit filed against the Ministry of Education requesting the cancellation of the disciplinary measures taken following the on-site investigation, the same as in the first trial.

Previously, Konkuk University invested 12 billion KRW, part of the rental deposit of the foundation's 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, or provide as collateral its basic property, it must obtain approval from the Ministry of Education.’ However, the investment was made without board resolution or Ministry of Education approval for the change of use of the income-generating basic property.

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 the Konkuk University Foundation and former president 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 and issued warnings to five directors. Furthermore, two former and current executives of the Konkuk University Foundation were disciplined, four individuals including the president of The Classic 500 were subject to severe disciplinary action, and Konkuk University was required to implement measures to prevent recurrence.

During the administrative lawsuit appeal, Konkuk University recovered all investment losses, leading the Ministry of Education to withdraw disciplinary actions such as revoking the chairman’s appointment approval and downgrade them to warnings. However, the Konkuk University Foundation did not withdraw the appeal and continued the lawsuit.

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