Busan Savings Bank collaborators punished one after another… Why was Jo Woo-hyung excluded?

In 2011, the Central Investigation Department of the Supreme Prosecutors’ Office, led by Chief Prosecutor Yoon Seok-yeol , identified and investigated 120 special purpose corporations ( SPCs ) under borrowed names for Busan Savings Bank . According to the Savings Bank Act, banks cannot develop real estate. However, Busan Savings Bank conducted real estate business under borrowed names using relatives of executives. ‘The Museum Yangji’, listed 75th in the ‘List of 120 Borrowed Name SPCs

of Busan Savings Banks’ announced by the Supreme Prosecutor’s Office’s Central Investigation Department, was the company operated by Jo Woo-hyung. (Related article: Target number 75 of the Supreme Prosecutor’s Central Investigation Department’s investigation was Jo Woo-hyung’s company)    Even after Newstapa’s report, the prosecution claims that Daejang-dong loan broker Jo Woo-hyung was not the target of the Supreme Prosecutor’s Central Investigation Department’s investigation in 2011. However, as a result of Newstapa’s coverage, some of the people who played a similar role to Jo Woo-hyung at the time were investigated and sent to trial. This is confirmed through several court rulings. The Central Investigation Department of the Supreme Prosecutors’ Office investigated some executives of Busan Savings Bank’s SPC under borrowed names. On May 2, 2011, the Central Investigation Department of the Supreme Prosecutors’ Office released a list of 120 special purpose corporations ( SPCs ) created by Busan Savings Bank under borrowed names. This list appears in the ‘Explanatory materials related to the prosecution of the Busan Savings Bank Group corruption case’. Through a search of court rulings, Newstapa looked into what kind of punishment the executives of the borrowed-name SPC , which the Supreme Prosecutors’ Office Central Investigation Department investigated at the time, received. The related rulings reveal various charges against executives who played roles similar to Jo Woo-hyung, including embezzlement, breach of trust, illegal lending, and fraud. The cases specifically confirmed through court rulings are as follows. The CEO and managing director of Sun City Construction, which carried out golf course projects in Geoje, Gyeongnam and Anseong, Gyeonggi, were indicted for embezzlement. The CEO of Hyosung Urban Development, who promoted apartment development in Incheon, was indicted for breach of trust. The CEO of Nakwon Housing Construction, which was in charge of apartment construction in Suncheon, Jeollanam-do, was indicted for fraud. The CEO of Landmark Worldwide ( LMW ), which was promoting the construction of a new city in Cambodia, and the CEO of Shinan World, which was promoting a development project in Shinan-gun, Jeollanam-do, were each indicted for embezzlement. Summarizing the above cases, the Central Investigation Department of the Supreme Prosecutors’ Office broadly investigated the fund flows of    SPCs under borrowed names of Busan Savings Bank and even investigated allegations of personal corruption committed by executives and brought them to trial.

The Central Investigation Department of the Supreme Prosecutors’ Office called in ‘Baji shareholders’ and investigated them, but did not investigate CEO Woo-hyung Jo. 

‘The Museum Yangji’, founded by Woo-hyung Jo in 2004, is 95%메이저사이트 owned by Busan Savings Bank, and SPC is a borrowed name of Busan Savings Bank, in which Woo-hyung Jo holds a 5% stake . all. Busan Savings Bank held 95% of its shares in the names of several individuals. It mobilized the so-called ‘pants shareholders’.

According to the court ruling, the Supreme Prosecutor’s Office’s Central Investigation Department summoned these ‘pants shareholders’ and investigated them. After confirming that their shares were actually owned by Busan Savings Bank, they had them write a memorandum of waiver to exercise their rights to their shares. However, Jo Woo-hyung, who served as co-CEO from its establishment in 2004 to August 2010, was not investigated. 

The Museum Yangji was in a very serious financial condition around the time the Busan Savings Bank crisis occurred. In this company’s <2010 Audit Report>, a sentence appears that “raises significant doubts about the company’s ability to continue as a going concern.” All indicators were a mess, including an operating loss of 1.181 billion won in 2010, a net loss of 5.901 billion won, and total liabilities exceeding total assets of 18.722 billion won. 

In November 2021, Jo Woo-hyung emphasized during the prosecution’s investigation that he owned a stake in The Museum Yangji and, while serving as its actual representative, he was the person who first created the concept of ‘townhouse’. 

The Museum Yangji’s negligence was serious, but no one was punished. 

In 2011, the Supreme Prosecutor’s Office’s Central Investigation Department summoned the shareholders and executives of The Museum Yangji and investigated. However, the current prosecution explanation is that Jo Woo-hyung, who served as CEO, was not the subject of the investigation. As a result, not a single official of The Museum Yangji was criminally punished at the time. The failure to properly investigate serious insolvency led to additional damage to savings bank depositors.  

The amount of loans that Busan Savings Bank had lent to The Museum Yangji as of 2010 amounted to 55.2 billion won. Although Jo Woo-hyung claimed that it was a successful ‘townhouse’ development, The Museum Yangji in the audit report recorded billions of won in deficit every year except for 2006. 

In 2013, after Busan Savings Bank went bankrupt, the Deposit Insurance Corporation (Yebo) filed two lawsuits against The Museum Yangji. Through this, Yebo led to a ruling in which The Museum Yangji received 2.7 billion won, a portion of the remaining loan balance of 14 billion won. However, even after 10 years, Yebo has not recovered this money.

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