Court says Taean oil-spill recovery groups must return 280 billion won in allocated funds

[Financial News] A court has ruled that the groups involved must return to the Community Chest of Korea about 280 billion won raised for local recovery and development after the 2007 oil spill in Taean, South Chungcheong Province.
According to legal sources on the 10th, the 31st Civil Division of the Seoul Central District Court partially ruled in favor of the plaintiff in a lawsuit filed by the Community Chest of Korea against the West Coast Union Foundation and the Hebei Social Cooperative, seeking the return of allocated funds. The court ordered the West Coast Union to pay about 100.1 billion won and the Hebei Social Cooperative about 185 billion won.
After the Taean oil spill, Samsung Heavy Industries agreed in 2016, under an agreement with groups representing affected residents, to donate 290 billion won to the Community Chest of Korea as a regional development fund. The affected-area groups later established the two organizations to pursue public-interest projects, including efforts to boost the local economy, and the organizations received portions of the fund in 2018.
However, concerns about the management of the fund continued to be raised from 2021 onward. Audits by the Ministry of Oceans and Fisheries and the Board of Audit and Inspection (BAI) reportedly found improper spending on travel expenses, unnecessary borrowing, and delays in forming the delegates’ general assembly, among other issues. After notifying the two organizations in August 2023 that they must return the remaining funds, the Community Chest of Korea filed suit when they did not comply.
The court found that the two organizations had made insufficient progress in carrying out public-interest projects. As of the end of 2021, the West Coast Union had spent only 4.4% of the fund, or 4.6 billion won, of which 3 billion won went to operating expenses such as personnel costs. The cooperative had spent 7.8% of the total, or 15.8 billion won, with 9.4 billion won used for institutional operating costs.
The court found that the West Coast Union appeared to have focused on operating expenses such as personnel costs rather than its stated purpose projects. It also found that internal conflicts had prevented the cooperative’s general assembly from fulfilling its role, disrupting the implementation of its projects. The court therefore concluded that the Community Chest of Korea’s recovery of the funds was lawful.
[email protected] Lee Jeong-hwa Reporter