Gukim Jinju (Eul) Kim Byung-gyu Preliminary Candidate Disqualified for General Election... Morality Controversy

During Tenure as Head of Tax Policy at Ministry of Economy and Finance, Received One-Month Suspension for Involvement in ShillaJen Incident

"This Case Has Already Been Cleared, There Will Be a Separate Opportunity to Explain Later"

Kim Byung-gyu, former Deputy Governor of the Gyeongnam Province Economy Office and a preliminary candidate for the People Power Party in the 22nd general election for Jinju-si (Eul) district in Gyeongnam, has been revealed to be involved in the SillaJen incident during his tenure as Director of the Taxation Office at the Ministry of Economy and Finance under the Moon administration, sparking heated local public opinion about the appropriateness of his candidacy.

The SillaJen incident is a major financial scandal that occurred in 2019 during the Moon Jae-in government, with over 170,000 small shareholders and approximately 30,000 elderly victims in their 60s and 70s reportedly affected.

Kim Byung-gyu, the People Power Party preliminary candidate for the 22nd general election, was found to have been involved in receiving a request from Moon Eun-sang, CEO of SillaJen and his high school junior, to cancel tax penalties while serving as Director of the Taxation Office at the Ministry of Economy and Finance in 2017. This was uncovered during an audit by the Board of Audit and Inspection, resulting in a one-month salary reduction disciplinary action, and he retired in October 2019.

Jinju candidate Kim Byung-kyu is announcing his campaign promises.

Candidate Kim was found to have engaged in improper conduct by using his position beyond his official duties to make phone calls to staff involved in the tax appeal case, requesting the cancellation of approximately 130 billion KRW in taxes imposed on him by Moon Eun-sang, his high school junior and CEO of SillaJen.

Regarding this, Kim Byung-gyu also acknowledged the facts, stating that he received a one-month salary reduction disciplinary action.

The tax appeal case involved Moon Eun-sang, CEO of SillaJen, who from 2014 to 2017 gained profits of 132.5 billion KRW from acquiring and exercising SillaJen BW (bond with warrants). The Busan Regional Tax Office imposed a gift tax of 49.4 billion KRW, which he contested by filing an appeal with the Tax Tribunal.

As a consequence of this case, SillaJen was eventually delisted in May 2020, causing significant losses to over 170,000 small shareholders.

During the Moon administration, the opposition party, People Power Party, continuously urged thorough investigations by judicial authorities into the SillaJen incident, a major financial scandal that caused numerous individual victims. However, for unknown reasons, the case was quietly closed, giving rise to various suspicions including allegations of involvement by higher-ups.

In particular, the Seoul Southern District Prosecutors’ Office’s Joint Financial and Securities Crime Investigation Unit, which mainly handled financial cases, was disbanded in January 2020 under the directive of former Minister of Justice Chu Mi-ae while the SillaJen case was still ongoing, fueling much speculation in the market regarding the case.

However, the Joint Financial Investigation Unit of the Seoul Southern District Prosecutors’ Office was reinstated shortly after President Yoon Suk-yeol took office, and it is reported that a large number of prosecutors and investigators with experience working at the Financial Intelligence Unit (FIU) of the Financial Services Commission, Financial Supervisory Service, Korea Exchange, financial tax departments, and investigation cooperation teams have been recruited.

Moreover, SillaJen, which had been delisted, was decided to maintain its listing in October 2022 after President Yoon’s inauguration, and its stocks are currently being traded.

The SillaJen incident, which occurred during the Moon Jae-in government, remains a major financial scandal whose full truth has not been uncovered in many respects. Depending on the extent of Kim Byung-gyu’s involvement, the impact on this general election is expected to be significant.

Regarding this, candidate Kim responded to the joint press team’s request for a rebuttal by saying, “This case has already been cleared. Otherwise, how could I have served as Deputy Governor of Gyeongnam Province?” and added, “There will be a separate opportunity to explain further in the future.”

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