[Asia Economy Reporter Kim Daehyun] Skin&Skin, a KOSDAQ-listed company, has effectively won the first trial in a lawsuit claiming damages against the main perpetrators of the "Optimus scandal," alleging that they "illegally embezzled company funds to prevent the suspension of redemptions of the Optimus fund."
According to the legal community on the 17th, the Civil Division 18 of the Seoul Central District Court (Presiding Judge Park Junmin) recently ruled in the first trial of the damages claim lawsuit filed by Skin&Skin against six defendants: Kim Jaehyun, CEO of Optimus; Lee Dongyeol, the second-largest shareholder of Optimus; Yoon Seokho, director of Optimus; Yoo Hyunkwon, former advisor of Skin&Skin; Lee (first name withheld), former CEO of Skin&Skin; and Lee (first name withheld), former chairman of Skin&Skin. The court ordered all defendants except Lee Dongyeol to jointly pay 1 billion KRW and delayed damages thereon.
Previously, it was investigated that in June 2020, CEO Kim and others embezzled 15 billion KRW of Skin&Skin’s funds by diverting them under the pretense of using them for mask distribution business. They fabricated false transfer confirmation documents indicating payment for mask purchases and submitted them to the board of directors. The embezzled 15 billion KRW was funneled into an Optimus affiliate engaged in mask wholesale and retail, and most of it was used to prevent the suspension of Optimus fund redemptions. At that time, CEO Kim effectively held the largest shares in both Skin&Skin and the mask wholesale and retail company.
Skin&Skin, which filed a 15 billion KRW damages claim lawsuit against Optimus, also separately filed this lawsuit against CEO Kim and others. They claimed, "The defendants conspired to embezzle the plaintiff’s funds by pretending to pay advance payments for mask supplies and misappropriated them for repayment of the Optimus fund," and demanded payment of 1 billion KRW, part of the damages caused by the illegal acts, plus delayed damages.
The court recognized the joint liability of CEO Kim and five others for the 1 billion KRW based on the fact that they were convicted in a criminal trial. However, the claim against Lee Dongyeol was dismissed, stating, "He was not indicted for the embezzlement in this case, and it is difficult to see that he conspired with the other defendants."
The "Optimus scandal" surfaced in June 2020 when redemptions of the private equity fund managed by Optimus were repeatedly suspended. According to the prosecution’s investigation, contrary to the investment proposal stating that the fund would be operated by discount purchasing of stable assets such as public institution-issued accounts receivable, Optimus purchased private bonds of special purpose companies (SPCs) under their control. Furthermore, it was revealed that they illegally used the invested funds?raised through forgery of accounts receivable documents and other methods?for so-called "fund rolling," paying redemption money to earlier investors, as well as for real estate development investments and acquisitions of listed companies.
The total amount of funds raised from investors in this manner reached 1.5952 trillion KRW, of which about 510 billion KRW was not repaid, causing investor losses. Considering that the prosecution confirmed 3,200 victims and that there are corporate and organizational investors, the actual damage is estimated to be even greater.
Regarding related charges, CEO Kim received a final sentence of 40 years imprisonment from the Supreme Court. Lee Dongyeol was sentenced to 20 years imprisonment and fined 500 million KRW, and Yoon Seokho received 15 years imprisonment and a 300 million KRW fine. Former advisor Yoo was sentenced to 17 years imprisonment and fined 500 million KRW.
Optimus was ultimately declared bankrupt by the court in August last year. The 15 billion KRW damages claim lawsuit filed by Skin&Skin against Optimus is still in the first trial phase.
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