[Exclusive] Myongji University President, Whose Director Position Was Canceled Due to 'Bankruptcy Responsibility,' Reinstated as Director

It was recently confirmed that Yoo Byung-jin, president of Myongji University (age 71), whose approval as a director of the school foundation was previously revoked due to responsibility for Myongji University's financial bankruptcy, has been reappointed as a director. Although Yoo's lawsuit to cancel the disposition was dismissed in the first trial, during the appeal process, the Ministry of Education's cancellation of his directorship was stayed, and during this suspension, Yoo was reappointed as a director. The Ministry of Education stated that it had no choice but to reapprove the directorship due to the stay of execution, but there are also criticisms that this approval set a precedent allowing directors of poorly managed private school foundations to retain their positions.

According to the registry of Myongji Academy, the school foundation of Myongji University, on the 18th, Yoo Byung-jin, president of Myongji University (age 71), was reappointed as a director as of May 19. His previous term was from May 19, 2018, to May 18 of this year. Yoo, who was first appointed as a director on May 19, 2008, is now serving his third term, and he has also been president of Myongji University since 2008, marking 15 years in the position.

President Yoo Byung-jin of Myongji University. [Photo by Myongji University]

The reason Yoo's reappointment is controversial is that on February 4, 2020, the Ministry of Education notified him of the cancellation of approval for his appointment as a director due to responsibility for Myongji University's bankruptcy. Myongji Academy had advertised and sold plots claiming to build a golf course on a senior welfare facility site within the Yongin campus in 2004, but failed to construct the golf course. After the golf course construction failure, 33 creditors including Mr. A filed a lawsuit for damages related to the sales payments and won. When compensation was not made, they filed for bankruptcy against Myongji Academy. SGI Seoul Guarantee, known to have issued guarantees to the buyers, applied for rehabilitation proceedings in 2020, which were initiated, but the court judged that the likelihood of Myongji University successfully implementing the rehabilitation plan was low and decided to suspend the rehabilitation proceedings on February 8 last year. On April 1 last year, Myongji Academy reapplied for rehabilitation proceedings as a debtor, and the rehabilitation plan was finally approved by the Seoul Rehabilitation Court on the 14th.

During this process, the Ministry of Education issued a notice titled "Correction Request for Myongji Academy and Myongji University and Warning of Cancellation of Approval for Appointment of Executives," notifying on February 4, 2020, the cancellation of approval for Yoo and others' appointments as directors. The approval and cancellation of approval for directors and chairpersons of school foundations are under the jurisdiction of the Ministry of Education. The Ministry cited reasons for the disposition including ▲ neglecting the duty of care as a good manager and audit duties, leaving the financial situation unattended until the corporation was subjected to bankruptcy application, causing a financial crisis for the corporation ▲ failure to present a fundamental financial recovery plan despite correction requests from the competent authority, resulting in non-implementation.

In response, 11 current and former directors including Yoo filed a lawsuit against the Minister of Education in March 2020 to cancel the disposition, but on September 23 last year, the claims of five people including Yoo were dismissed. The court judged that although Yoo did not directly participate in the decision that led Myongji Academy into financial crisis, considering his tenure, there was a breach of the duty of care for failing to secure financial soundness. However, the stay of execution for Yoo's disposition was granted, and during this period, Yoo was reappointed as a director. Some argue that the Ministry of Education should reconsider approving Yoo's reappointment this year. According to the Private School Act, a person whose approval for appointment as an executive has been canceled cannot become an executive of a school foundation within 10 years of the cancellation.

The Ministry of Education stated that it had no choice but to follow the court's stay of execution decision while the lawsuit is ongoing. A Ministry official said, "During the stay of execution period, it is as if there is no disposition, so the Ministry of Education cannot refuse to reapprove." It is understood that nine people including Yoo, excluding two plaintiffs who withdrew their appeals, have been undergoing an appeal trial against the Minister of Education at the Seoul High Court since October last year.

Regarding this, Myongji Academy responded that it could not comment as it is related to a personal lawsuit. A Myongji Academy official said, "It is an ongoing personal lawsuit process and the cancellation approval has not been finalized," and added, "Please send an official letter if you want to hear the president's position."

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