[Exclusive] "The CEO Must Repay" vs "Never Borrowed"... SME's Legal Battle

Employees File Lawsuit Claiming 200 Million KRW Loan
"Funds Used for Business but Not Repaid"
Court Orders Provisional Seizure of Claims Between Customs Office and Company
Company Representative States "Corporation Never Borrowed Money"

The CEO of a company selling government-forfeited goods from the Korea Customs Service borrowed business funds from employees and failed to repay them, leading to lawsuits filed by the employees and ongoing conflicts among the executives and staff. Since the company sells government-forfeited goods, this has resulted in a decline in the quality of services provided to the public, prompting the Korea Customs Service to consider necessary measures.
Photo by Korea Customs Service website screenshot

[Asia Economy Reporter Oh Gyumin] Conflicts continue among executives and employees as the CEO of a company selling government-forfeited goods from the Korea Customs Service borrowed business funds from employees and failed to repay them, leading the employees to file a lawsuit.

Two employees of the Boseong Distribution Business Group, a corporation, filed a loan claim lawsuit against CEO A at the Seoul Central District Court last October. The employees claimed that A borrowed 200 million KRW from them to use as business funds for bidding and other purposes but did not repay the money. It is reported that they submitted remittance records and other evidence to support their claim. In response, the court issued a provisional seizure in November on the 200 million KRW claim related to the auction fees and agency fees that the Korea Customs Service pays monthly to Boseong.

Goods confiscated by the Korea Customs Service from smugglers or tourists are sold to general consumers through entrusted sales agencies. Until last year, the Sangigun-gyeonghoe handled the sales, but earlier this year, the corporation Boseong won the bid for this business and began selling the goods. According to employees, before the bidding, A requested those with over 10 years of experience in related work to ▲provide 200 million KRW in funds to secure the bid ▲and work as employees if the agency was designated. After Boseong was designated for the business, the employees started working at the distribution business group, but they claim that A only said “I will return it soon” and has not repaid the money.

There are also allegations that the employees were excluded from work around the time they demanded repayment. The employees stated, “Our access rights to Customs Service documents necessary for work were revoked, causing disruptions,” and “There were times when the documents issued by the Customs Service differed from those we received, leading us to suspect that the documents were ‘manipulated’ in the middle.”

CEO A denies these claims. Regarding the employees’ lawsuit, it is reported that he responded that “the defendant corporation did not borrow 200 million KRW from the plaintiffs.” On the allegations of work exclusion, A stated, “It was simply a matter of not properly reporting business trips or unifying official documents previously received via personal email to the corporation’s email,” and added, “It seems they were dissatisfied when asked to report their work done through Customs Service connections to the company.”

The Korea Customs Service stated that it will take necessary measures if the sale of goods forfeited to the state is hindered. According to the Korea Customs Service’s regulations on the management of confiscated and government-forfeited goods, the Commissioner of the Korea Customs Service and the managing customs offices may take necessary actions if management and supervision of entrusted sales agencies are required. The Korea Customs Service said, “We have been aware of related issues, including complaints about employee unfriendliness, since July,” and added, “If provisional seizures and other actions actually cause disruptions to business, we are considering necessary future measures.”