Corporation Issued KRW 200.2 Billion in Guarantee Certificates, Pocketed Fees... Court Orders Dissolution

Operated a surety insurance business without authorization or capital for over 10 years

Pocketed KRW 3 billion in fees... Repeated offenses despite being penalized seven times

Prosecution Service sought corporate dissolution under the Commercial Act

A court has ordered the dissolution of a corporation that issued more than KRW 200 billion worth of surety insurance certificates without authorization or capital and pocketed the fees.

Employees arrive at the Seoul Central District Public Prosecution Office in Seocho-gu, Seoul, on October 2, as prosecution offices with both investigative and prosecutorial powers closed their doors after 78 years under Lee Jae-myung's prosecution reform, and the Public Prosecution Office and Serious Crimes Investigation Office officially launched. October 2, 2026. Photo by Kang Jinhyung.

The Criminal Division 9 of the Seoul Central District Prosecution Service, headed by Chief Prosecutor Ko Eunbyeol, said on Nov. 6, "We received a court order on Nov. 3 for the dissolution of K Corp."

Executives and employees of K Corp. are suspected of issuing a total of KRW 200.2 billion worth of insurance certificates guaranteeing the repayment of debts to creditors, including local governments, despite having neither the intention nor the ability to pay out on the guarantees. Investigators found that they collected about KRW 3 billion in fees for issuing the certificates but did not honor the actual guarantee obligations.

They are believed to have exploited the fact that violations of the Insurance Business Act resulted only in small fines, repeatedly committing the crimes for more than 10 years while changing the corporation's name and its executives.

On Aug. 5, the Seoul Central District Prosecutors' Office indicted six executives and employees of K Corp., including its current and former CEOs, on charges including violating the Insurance Business Act and fraud and embezzlement under the Act on the Aggravated Punishment of Specific Economic Crimes. Three of them were arrested directly by prosecutors.

The Prosecution Service sought the corporation's dissolution under Article 176 of the Commercial Act, citing, among other factors, that K Corp. had operated an illegal surety insurance business for more than 10 years and had been punished seven times for violating the Insurance Business Act. The article provides that a court may order a corporation's dissolution if a director commits an act in violation of laws or regulations that makes it impermissible for the company to continue to exist.

The Seoul Central District Prosecution Service said, "We will continue to do everything in our power to protect the public as their representative."

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