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Execs of int'l school in Seoul indicted over alleged embezzlement

All News 12:00 March 08, 2016

SEOUL, March 8 (Yonhap) -- Prosecutors said Tuesday they have indicted three board members of the Seoul branch of a British international school over allegations they embezzled some billions of won in school expenses in violation of the private school act.

The Seoul Central District Prosecutors' Office said the dean of admissions at the school, identified only by her surname Lee, is accused of siphoning off some 7.2 billion won (US$6 million) of tuition from 2010 to 2015 to redeem loans. The money was borrowed to build school buildings.

Lee's 50-year-old husband and a Singaporean chief financial officer of a for-profit corporation located on the Cayman Islands were also indicted over the same charges.

The company holds de facto control over a nonprofit paper company in Hong Kong, which was set up to establish the Seoul branch of the school.

Under the private school act, only nonprofit organizations can run international schools in South Korea.

Prosecutors said they suspended taking action against a 55-year-old chief executive officer (CEO) of the corporation at the tax haven, as he was abroad and constantly denied to appear before prosecutors. The CEO is a Swiss national.

The four suspects are all board members of the nonprofit organization in Hong Kong.

They are also suspected of arranging a contract that obliges the school to pay some 3.6 billion won in franchise fees to the Hong Kong company. The Seoul branch is already obliged to pay 800 million won to the British school in royalties.

The indictment came a few months after prosecutors raided the school in Seocho district, south side of Seoul, and confiscated school management records and bank statements.

The school, which opened in September 2010, provides courses for primary and secondary students. The tuition fee is known to be more than 30 million won a year, far surpassing that of other schools here.


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