[Exclusive] Skin&Skin Loses Optimus 18 Billion Won Compensation Lawsuit

Skin&Skin, a KOSDAQ-listed company, filed a lawsuit seeking over 18 billion KRW in damages against Optimus Co., Ltd., claiming that the company embezzled funds to prevent the redemption suspension of a fund, but lost in the first trial. The court ruled that Skin&Skin either knew about the related illegal acts or at least failed to detect them due to its own negligence.

[Image source=Yonhap News]

According to the legal community on the 17th, the Civil Division 30 of the Seoul Central District Court (Presiding Judge Jeong Chan-woo) recently ruled against the plaintiff in the first trial of the damages claim lawsuit worth approximately 18.07 billion KRW filed by Skin&Skin against Optimus and related corporations.

In June 2020, Kim Jae-hyun, the representative of Optimus, and his associates embezzled 15 billion KRW of Skin&Skin’s funds under the pretense of using them for mask distribution business, then deceived Skin&Skin’s board of directors by pretending to have paid for mask purchases. The embezzled money was transferred to a mask wholesale and retail company affiliated with Optimus and was mostly used to prevent the suspension of fund redemptions by Optimus. At that time, Kim held the largest shares in both Skin&Skin and the mask wholesale and retail company.

Skin&Skin filed a damage claim against Optimus, the employer of Kim, demanding compensation for the embezzled funds and delayed damages. In August last year, Skin&Skin requested the Korea Deposit Insurance Corporation, the bankruptcy trustee of Optimus following its bankruptcy declaration, to confirm the claim amount as a bankruptcy claim. On the other hand, Optimus and others denied responsibility, arguing that it was solely Kim’s personal illegal act.

The court first stated, “Although the embezzlement was a personal deviation by Kim, it was related to the execution of Optimus’s business,” and explained, “Unless there are ‘special circumstances,’ Optimus must pay the 15 billion KRW and delayed damages.”

However, the court also ruled that “Skin&Skin cannot claim damages against Optimus.” The court noted, “The actual management rights of Skin&Skin were held by Kim’s side. When the previous representative of Skin&Skin repeatedly opposed prepaying for masks, Kim and others replaced the representative with an associate, Mr. A, who was aware of and actively conspired in the crime as Skin&Skin’s representative.”

The court indicated that if Skin&Skin had exercised even minimal caution, it could have recognized that the mask payment transactions were not related to Optimus’s business execution but were illegal acts by Kim and others.

Meanwhile, earlier this year, the court ruled in a separate lawsuit where Skin&Skin sued Kim, the second-largest shareholder of Optimus, an Optimus director, former Skin&Skin advisor Yoo Hyun-kwon, and three others for 1 billion KRW in damages, stating that “Kim and others must jointly pay 1 billion KRW and delayed damages.”

The ‘Optimus scandal’ surfaced in June 2020 when the redemption of private funds managed by Optimus was repeatedly suspended. Contrary to the promotional claims that the fund would be operated by purchasing stable assets such as public institution-issued accounts receivable at a discount to generate profits, Kim and others purchased private bonds of special purpose companies (SPCs) they controlled. They also used investment funds illegally by rolling over redemption payments to earlier investors or investing in real estate and acquiring listed companies. The total amount of investment funds raised in this manner reached 1.5952 trillion KRW, of which about 510 billion KRW was not repaid to investors. Kim was sentenced to 40 years in prison by the Supreme Court.

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