Former Dongyang Life CEO Referred for Embezzlement of 2 Billion Won in 'Tennis Court Bypass Bid' Case
The former CEO of Dongyang Life Insurance, who is accused of causing a loss of over 2 billion KRW to the company during the process of acquiring the operation rights of a tennis court, has been handed over to the prosecution.
The Financial Crime Investigation Unit of the Seoul Metropolitan Police Agency announced on the 2nd that it had sent Zhou Guodan, a former CEO of Taiwanese nationality, to the prosecution without detention at the end of last month on charges of breach of trust and embezzlement.
Former CEO Zhou is accused of causing a loss of about 2 billion KRW to the company by signing a contract with Company A under unfavorable conditions to acquire the operation rights of Jangchung Tennis Court in Jung-gu, Seoul. Earlier, the Financial Supervisory Service (FSS) detected circumstances where Dongyang Life Insurance, acting as the de facto operator of Jangchung Tennis Court, acquired the operation rights under unfavorable conditions for the company and reported this to the police last year.
According to the police and the FSS, Company A, which operates a sports club, won the bid for the operation rights of Jangchung Tennis Court in 2022. Company A acquired the operation rights at 2.66 billion KRW, whereas the previous winning bid was 370 million KRW. Dongyang Life Insurance agreed to compensate Company A with 2.7 billion KRW over three years under the name of advertising expenses. Additionally, 160 million KRW was paid for labor and management costs under the name of advertising agency fees.
Based on these contract details, the FSS and police judged that the de facto operator of the tennis court was Dongyang Life Insurance. Since Dongyang Life Insurance did not meet the operator qualification requirements such as 'tennis court operation performance within the last five years,' former CEO Zhou allegedly used Company A as a proxy to win the bid indirectly and compensated the bid amount by funneling advertising expenses, thereby causing losses to the company.
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Dongyang Life Insurance explained that it pursued the operation of the tennis court as part of healthcare services utilizing tennis, but some raised suspicions that this reflected the hobby of former CEO Zhou, who is known as a tennis enthusiast.
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