Will 5.5 Billion Won from Jeon Du-hwan's Osan Land Be Recovered? Trust Company Loses Appeal Lawsuit

A trust company filed a lawsuit in opposition to the confiscation of auction proceeds from land owned by the family of former President Jeon Du-hwan, but lost in the first trial.

The Administrative Court of Seoul, Administrative Division 6 (Presiding Judge Lee Ju-young) ruled on the 7th that Kyobo Asset Trust's lawsuit against the Korea Asset Management Corporation to cancel the disposition of auction payment distribution was dismissed. Kyobo Asset Trust sought the invalidation of the disposition primarily and alternatively requested its cancellation, but both were rejected.

Former President Jeon Du-hwan

The court judged, "The disposition to seize real estate in Osan, Gyeonggi Province and to distribute a total of 5.5 billion KRW from the real estate sale proceeds to the Seoul Central District Prosecutors' Office in three installments is lawful."

This lawsuit concerns a dispute over the confiscation of the land value of three out of five forest land parcels in Osan City entrusted to Kyobo Asset Trust by the family of former President Jeon.

Former President Jeon was sentenced to life imprisonment and a confiscation order of 220.5 billion KRW by the Supreme Court in 1997 on charges including rebellion and bribery. In 2013, the prosecution seized five forest land parcels in Osan City to enforce the confiscation order, and in 2017, the forest land was auctioned, distributing 7.56 billion KRW as part of the confiscation amount.

Kyobo Asset Trust filed a lawsuit in July of the same year to cancel the seizure, claiming the seizure disposition was invalid, and in 2019 filed an administrative lawsuit to cancel the distribution of auction proceeds for three parcels. The Supreme Court ruled in July last year that the prosecution's seizure was lawful, resulting in two parcels worth approximately 2.052 billion KRW reverting to the national treasury; however, the three parcels involved in the distribution cancellation lawsuit have not yet been recovered.

The court found, "It was acknowledged in the seizure invalidation lawsuit that the plaintiff already knew the property was illegal at the time of the collateral trust." The court also rejected Kyobo Asset Trust's claim that confiscation or seizure was invalid because former President Jeon had already passed away, stating, "The disposition does not become illegal retroactively simply because the individual died after the disposition."

The state has recovered 128.22 billion KRW in confiscation funds from former President Jeon to date. If this ruling is finalized, the prosecution will be able to recover an additional 5.5 billion KRW.