Konkuk University Foundation in 'Optimus Investment' Case Appeals Ministry of Education Disciplinary Cancellation Administrative Lawsuit

[Asia Economy Reporter Yoo Byung-don] Konkuk University Foundation, which was disciplined for investing in the Optimus Asset Management private equity fund without the Ministry of Education’s approval, has filed an appeal after losing the first trial in an administrative lawsuit over the disciplinary action.

According to the legal community on the 2nd, Konkuk University Foundation submitted an appeal to the Seoul Administrative Court, Administrative Division 3 (Chief Judge Yoo Hwan-woo) on the same day. Previously, Konkuk University had filed an administrative lawsuit against the Ministry of Education, requesting the cancellation of the disciplinary measures imposed following an on-site investigation by the Ministry, but lost in the first trial.

Konkuk University’s profit-making entity, 'The Classic 500,' invested 12 billion KRW of rental deposit funds, which should have been kept and maintained as fixed deposits, into Optimus in January last year without board deliberation or Ministry of Education approval.

After the Optimus fund fraud scandal emerged and Konkuk University’s investment became controversial, the Ministry of Education conducted an on-site investigation and in November last year requested an investigation into Konkuk University Foundation Chairperson Yoo Ja-eun and former The Classic 500 President Choi Jong-moon on charges of breach of trust.

The Ministry of Education also initiated procedures to revoke the approval of appointment for Chairperson Yoo and the foundation’s auditor, issued warnings to five board members, demanded disciplinary action against two current and former executives of Konkuk University Foundation, and severe disciplinary measures against four individuals including The Classic 500’s president. Additionally, the Ministry required Konkuk University to implement measures to prevent recurrence.

In court, Konkuk University Foundation argued that rental deposits, unlike real estate, are not included in the basic assets, so investing in Optimus did not require Ministry approval or prior board deliberation and resolution.

However, the first trial court ruled that Ministry approval was necessary for investing rental deposits in funds. Although rental deposits are not basic assets, the court reasoned that if losses from the investment prevent the return of the deposit, the real estate could be auctioned off, thereby reducing the basic assets.

Konkuk University also claimed that it confirmed the safety and transparency of the Optimus fund before investing, but the court rejected this, stating, "Purchasing a financial product that assumes the possibility of principal loss itself indicates that the funds were not managed soundly."

Meanwhile, the Seoul Eastern District Prosecutors’ Office dismissed charges without indictment in May against Chairperson Yoo and former President Choi, who faced allegations of violating the Private School Act and embezzlement and breach of trust under the Act on the Aggravated Punishment of Specific Crimes. The Health and Medical Workers’ Union Konkuk University Chungju Hospital branch, which had filed the complaint against Yoo and Choi, recently appealed the prosecution’s non-indictment decision to the Seoul High Prosecutors’ Office.

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