[Seocho-dong Legal Talk] Spotlight on Lee Jeong-seop, Deputy Chief Prosecutor Reborn as the 'Corporate Grim Reaper'

Prosecutor's flag hanging in front of the Central District Prosecutors' Office in Seocho-dong, Seoul
Photo by Yonhap News

[Asia Economy Reporter Kim Hyung-min] The business community is hunkering down amid a prosecutorial chill ahead of the year-end and New Year holidays. The prosecution is accelerating efforts to wrap up various corporate cases before the year ends.

At the center of this is Lee Jeong-seop, Chief Prosecutor of the Seoul Central District Prosecutors' Office (Judicial Research and Training Institute Class 32), and the Fair Trade Investigation Division he leads. Since his appointment to the Central District Prosecutors' Office Fair Trade Investigation Division in July, Chief Prosecutor Lee has been regarded as a "corporate grim reaper," drawing significant attention from both the business and legal communities.

According to the legal community on the 19th, Chief Prosecutor Lee and his investigation team, after indicting SPC Group Chairman Heo Young-in and others without detention on charges of breach of trust on the 16th, are focusing on additional investigations into unfair support activities by affiliated companies. Chairman Heo and others are accused of selling shares of Mildawon held by SPC affiliates to Samlip at a low price to avoid gift tax imposed on the chairman's family in December 2012, causing losses to Shani and Paris Croissant. The prosecution plans to conclude this case with the indictment of Chairman Heo and others, while continuing to investigate the case reported by the Fair Trade Commission, which accused SPC of providing 41.4 billion KRW in unfair support to Samlip within the group from April 2011 to April 2019.

In addition, from the 12th to the 15th, Chief Prosecutor Lee and his team summoned and questioned former CEOs Nam Yoon-young of Dongkuk Steel and Kang Hak-seo of Hyundai Steel, among others, who were involved in a 6 trillion KRW steel rebar cartel. On the 24th of last month, they conducted a search and seizure of Korea Tire & Technology and three of its affiliates, as well as one related company, in connection with allegations of unfair support by affiliates. Prosecutors and investigators also visited the office of Cho Hyun-beom, Chairman of the Korea Tire Group. Due to the statute of limitations, the investigation team aims to conclude this case within this month. The prosecution is also expected to soon decide whether to indict seven insurance companies involved in bid-rigging for Korea Land & Housing Corporation (LH) insurance contracts, Lotte Chilsung over allegations of unfair support by affiliates, and SK Planet, suspected of colluding on overdue fees among four small mobile payment companies.

Previously, cases involving Samsung Electronics (preferential treatment of Samsung Welstory), Naver (abuse of market dominance related to real estate business), Binggrae, Lotte Food, Lotte Confectionery, Haitai Confectionery & Foods (ice cream price collusion), and Harim, Olpum, Hangang Food, Dongwoo Farm to Table, Maniker, Cherrybro (chicken price collusion) were brought to trial.

The legal community analyzes that the significant progress in corporate investigations this year is due to Chief Prosecutor Lee's aggressive investigation style and swift judgment. Known as a "fighter prosecutor," he has a notorious reputation among criminals. His hobby is boxing. He started boxing in high school and was registered as an official boxer with the Korea Amateur Boxing Federation while attending the Judicial Research and Training Institute. Using his unique investigative methods, he has consecutively brought "living powers" to trial. Former Justice Minister Cho Kuk (for halting the investigation of Yoo Jae-soo), former Seoul Central District Prosecutor General Lee Seong-yoon, and former Blue House Civil Affairs Secretary Lee Gwang-cheol (for illegal travel ban on Kim Hak-ui) were all indicted by him. There are rumors that Chief Prosecutor Lee considered resigning after indicting former Secretary Lee, but he ultimately decided to stay. The Ministry of Justice's appointment of him as head of the Seoul Central District Prosecutors' Office Fair Trade Investigation Division in July appears to recognize his capabilities. Chief Prosecutor Lee's corporate investigations have only just entered their fifth month. The business and legal communities are expected to pay even closer attention to the investigation results he will produce going forward.