[Exclusive] Seongnam City Breaks Promise of Job Security for Seongnam FC Staff, Takes Personnel Action... Lee Jae-myung Approval (Comprehensive)

Acquired from Unification Church Foundation in 2013
Took budget with employment guarantee conditions
Audit and early retirement applications within a year
Remaining staff assigned to sidelined positions
Seongnam city officials fill vacancies
"Preliminary work for Mayor Lee Jae-myung's team control"
Analysis by football community insiders at the time
Lee's side: "Personnel changes made through legal procedures"

[Asia Economy Reporter Kim Hyung-min] It has been confirmed that Seongnam FC soccer team received an unusual personnel action, including early retirement, from Seongnam City just before receiving sponsorship funds suspected of being quid pro quo. The organizational restructuring and personnel plan that sparked internal backlash were approved by Lee Jae-myung, then mayor of Seongnam City and owner of Seongnam FC, who is currently the presidential candidate of the Democratic Party of Korea.

On the 11th, based on the ‘Seongnam FC Organizational Restructuring Plan’ reported in December 2014, which Asia Economy exclusively obtained, along with other materials and tips, Seongnam City reorganized the internal structure of Seongnam FC in December 2014 and took unplanned personnel measures such as accepting early retirement applicants. In this process, most employees who had worked since the predecessor of the soccer team, Seongnam Ilhwa Cheonma, were forced to resign. Seongnam City also took retaliatory personnel actions against the remaining employees who did not resign.

◆Seongnam City broke the ‘employment guarantee’ promise made at the time of club acquisition, coercive personnel actions

The predecessor of Seongnam FC was the Seongnam Ilhwa Cheonma professional soccer team. In August 2013, the Unification Church Foundation, which operated the club, decided to withdraw, and two months later, Seongnam City acquired the club. At that time, Seongnam City promised to guarantee the employment of existing employees who had worked at Seongnam Ilhwa. A soccer industry insider said, "At that time, the Unification Church Foundation left a budget of 1 billion won and other physical and human resources on the condition of employment guarantee, all of which Seongnam City took over."

However, Seongnam City changed in July 2014. It conducted a surprise audit of the club and notified the club in December of the same year that it would reorganize some departments by merging and abolishing them. They also accepted early retirement applicants. The applicants were ‘employees who had worked for more than one year and wished to retire,’ and the personnel committee was to decide the candidates after deliberation. Inside the club, this was perceived as a ‘targeted personnel action’ against the remaining employees who had worked since the Seongnam Ilhwa era.

As a result, many employees left the company, and only a few remained. In January 2015, Seongnam City transferred the remaining employees to a new department called the ‘Special Task Force for Revenue Increase.’ Their opinions were naturally disregarded, and they were implicitly forced to resign by being made to work like ‘call center’ employees who only answered phones in a lobby meeting room without heating or cooling. After no significant results, this department was abolished, and all employees were reportedly dismissed.

◆Suspicion of Lee’s direct approval as a preparatory step to seize control of Seongnam FC

It has been confirmed that Candidate Lee signed off on all organizational restructuring and personnel approval plans as the mayor of Seongnam at the time. Legal and soccer industry insiders analyzed that Mayor Lee might have been conducting preparatory work to seize control of the club by planting many close aides from Seongnam City into the club. In fact, the positions vacated by departing employees were filled by Seongnam City officials. An insider familiar with the club’s situation said, "During the first year after the club’s founding, personnel changes were made four or five times a month, with many Seongnam City public officials moving to the club," adding, "Seongnam City pressured employees to resign by mobilizing labor attorneys and lawyers even before starting the personnel work." It was also confirmed that many officials who led the club audit and organizational restructuring at Seongnam City were transferred to the Gyeonggi Provincial Government after Mayor Lee became governor of Gyeonggi Province and are still working there.

Seongnam FC later received 16 billion won from six local companies between 2015 and 2017 under the names of sponsorship and advertising fees. There is a view that the large-scale personnel actions were preparatory steps to receive these sponsorship funds. Regarding the sponsorship funds, suspicions of quid pro quo to resolve corporate issues have been continuously raised, and the police are currently conducting a reinvestigation.

The Lee Jae-myung campaign explained, "The acquisition from Seongnam Ilhwa to Seongnam Citizen Professional Soccer Club was conducted through agreed and lawful procedures," adding, "The club, which was on the verge of dissolution, was newly founded as a private company club, accommodating as much human resources as possible." They further stated, "For operational efficiency, some executives including the secretary-general underwent voluntary retirement and personnel transfers, but these were conducted in principle according to employment regulations and labor law standards, and the majority of employees facing job loss were retained."

They also emphasized, "Despite various oppositions, this is a model case where a club on the verge of dissolution was linked to the founding of a citizen club through negotiation."