Police probe LG Energy Solution ex-president over consulting fees in the 10-billion-won range paid to family-linked firm

[Financial News] A former LG Energy Solution president is under police investigation on suspicion of causing the company losses in the 10-billion-won range by arranging for consulting fees to be paid to a Chinese consulting firm linked to the former president’s family. 
According to police and other sources on the 14th, the Financial Crime Investigation Unit of the Metropolitan Investigation Unit at the Seoul Metropolitan Police Agency recently searched the home and office of former LG Energy Solution president Lee on suspicion of breach of trust in the course of business, and seized mobile phones and other items.
The former president is suspected of causing an LG affiliate losses of about 10 billion won while in office by paying consulting fees to a particular consulting firm under the pretext of local consulting in China. The firm is reportedly a company established by a Korea-China economic exchange organization whose Korean representative is a member of the former president’s family.
At the time, LG signed a contract with the firm to obtain advice on matters such as Chinese government licensing and approval procedures as it pursued investment to build liquid-crystal display (LCD) production facilities in China. The contract reportedly began around 2010, when LG was seeking to enter the Chinese market, and continued until around 2023, when Lee left office.
LG paid about $20,000 (approximately 28 million won) a month in consulting fees, and the total amount paid to the firm is believed to have come to nearly 10 billion won. Lee also entered into an advisory contract with LG Energy Solution after leaving office.
Police are examining the substance of the contract and the flow of funds by analyzing the seized items, including whether the firm actually provided consulting services and how the money paid was used. They are also looking into whether Lee was involved in entering into the contract with the firm and whether the then CEO was involved in approving it.
Earlier, four LG affiliates—including LG Energy Solution, LG Display, LG Chem and the LG Economic Research Institute—filed complaints with police early this year after receiving an internal tip and conducting an audit.
Lee’s side reportedly denies the allegations. It maintains that it is difficult to understand how a contract with the consulting firm could constitute breach of trust.

[email protected] Choi Seung-han Reporter