Dispute Over Sale of Sinan Solar Power Plant... Company Claims "Unfair Treatment"

Complainant Claims "Contract Was Not Fulfilled by the Agreed Date"
Company Responds "Delays and Unpaid Penalties Caused the Issue... Procedures Still Underway"

The Jeonnam Provincial Police Agency has launched an investigation after receiving a complaint alleging that a solar power developer in the Jeonnam region solicited investments totaling around 4 billion won by offering to sell a power plant, but subsequently failed to fulfill the contract. Meanwhile, the company in question has strongly refuted the allegations made by the complainant.

The second Anti-Corruption Investigation Unit of the Jeonnam Provincial Police Agency has received a complaint against the CEO, Mr. A, of solar power developer Company S, based in Jeonnam, and one other individual. The charges include violations of the Act on the Aggravated Punishment of Specific Economic Crimes (fraud), breach of trust in the course of work, and embezzlement in the course of work. The police are currently conducting an investigation.

According to the complaint, on September 30, 2024, the complainant and Mr. A entered into a comprehensive transfer agreement for two 1MW-class solar power plant sites located in Samdu-ri, Imja-myeon, Sinan-gun, Jeonnam. The main point of the contract was that the business rights and related interests would be transferred to the complainant by December 31, 2024, after the completion of the power plants.

The complainant claims to have paid a total of 3.95 billion won as a contract deposit, interim payment, and final payment, but asserts that the transfer of the power plants has not yet been carried out.

The complainant maintains that, even though it was expected that the project could not be completed within the agreed time frame due to delays in Korea Electric Power Corporation (KEPCO) distribution line construction, Mr. A did not sufficiently explain or provide information about these issues.

Additionally, the complainant stated, "Even after the completion of the power plants, Mr. A continued to postpone the fulfillment of the contract for various reasons," and claimed, "Even after the pre-operation inspection was completed, he did not immediately inform us, but only urged the payment of the remaining balance."

Jeonnam Provincial Police Agency exterior view

The complainant added, "As a result, we lost the opportunity to arrange loans from financial institutions in advance, and this is suspected to be a deceptive act aimed at increasing pressure for fundraising."

On the other hand, Mr. A has denied the complainant's allegations, arguing that they are not based on facts.

Mr. A stated, "The complainant paid the interim and final payments later than the contractual deadlines and also failed to pay the late payment penalties that accrued as a result. After the contract was signed, we learned of the delay only upon receiving an official letter from KEPCO, and we were communicating with the transferee about the possibility of construction delays. The contract also specified the possibility of delayed completion due to KEPCO construction. Therefore, as not all contractual obligations had been fulfilled, the transfer process could not be finalized."

He further explained, "This contract is not just a simple transfer of power plant shares, but a comprehensive transfer of the entire business, including land, power generation facilities, and various permits and rights. We are following all required procedures in accordance with relevant laws and administrative processes, and the contract is being executed properly."

Mr. A also dismissed the claim that the delayed notification of the pre-operation inspection resulted in the loss of an opportunity to secure loans from financial institutions.

He stated, "The contract does not contain any specific obligation to provide prior notice regarding the completion of the pre-operation inspection. It is my understanding that the complainant's interim payment was delayed due to funding issues, and that even the final payment was raised not through loans from financial institutions, but through private loans."

He added, "The contract is still proceeding according to the established procedures, and we cannot agree with the one-sided accusation of fraud."

Meanwhile, the police conducted a face-to-face interview between the complainant and the accused in April and are currently verifying the facts regarding the circumstances of the contract, the flow of funds, and the overall process of contract execution.

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