Last Week's Kyobo Asset Trust Execution Objection Dismissed
The court has ruled that there is no issue with the prosecution's enforcement of the confiscation payment from the public auction of forest land in Osan City, which was owned by the late former President Jeon Du-hwan's family.
According to the legal community on the 11th, the Criminal Division 1-3 of the Seoul High Court (Presiding Judges Seo Kyung-hwan, Han Chang-hoon, Kim Woo-jin) dismissed the objection to the execution of judgment filed by Kyobo Asset Trust in 2016 on the 8th.
Forest land in Osan City owned by the late former President Jeon Du-hwan's family. [Photo by Yonhap News TV]
The court held that since the prosecution had already completed the enforcement of confiscation at the time it seized the land and sold it through a public auction, the objection had no practical benefit.
Kyobo Asset Trust raised an issue regarding the public auction proceeds of approximately 7.5 billion won from five parcels of forest land in Osan City that the former president's family had placed in trust.
In 2008, Kyobo Asset Trust entered into a real estate collateral trust contract for five parcels of forest land in Osan, Gyeonggi Province, owned by the former president's family, and completed the ownership transfer registration.
However, when the prosecution seized these properties in 2013 to enforce the confiscation judgment against the former president, Kyobo Asset Trust filed an objection to the execution with the Seoul High Court in 2016.
But the following year, the prosecution put the five seized parcels of forest land up for public auction and received 7.56 billion won as their share of the confiscation funds.
Kyobo Asset Trust then filed a lawsuit in 2017 against the prosecution to confirm the invalidity of the seizure, and in 2019, filed another lawsuit to cancel the distribution of 5.5 billion won from the public auction proceeds of three parcels of forest land in Osan.
In court, Kyobo Asset Trust argued that since the distribution for the three parcels had not yet been actually paid, the enforcement was not complete, and that the confiscation procedure should be stopped altogether due to the former president's death, but this was not accepted.
They attempted to block the confiscation based on the provision in the Criminal Procedure Act that enforcement of unpaid confiscation is suspended upon the death of the subject, but this attempt failed.
The lawsuit, which began in 2016, was scheduled to await the Supreme Court's final ruling on the invalidity of the seizure.
In July last year, the Supreme Court concluded that the seizure by the prosecution was valid, ruling that the Osan forest land was illegal property under the Public Official Crime Forfeiture Act, as it was owned under the names of the former president's brother-in-law, Mr. Lee, and his son, who borrowed the names, and that Kyobo Asset Trust was aware of these circumstances.
According to this ruling, the land value of two parcels of forest land, approximately 2.05 billion won, was forfeited to the national treasury. However, the distribution of the public auction proceeds for the three parcels, amounting to 5.5 billion won, is still under litigation and has not yet been recovered. The first trial court ruled on April 1 that the distribution of confiscation funds was lawful, and Kyobo Asset Trust has appealed.
As a general principle, enforcement of property penalties, including forfeiture or confiscation, is carried out against the convicted person, and if the convicted person dies, enforcement against inherited property cannot proceed unless there are special provisions such as Article 478 of the Criminal Procedure Act.
Following this principle, the Supreme Court ruled in July last year in the lawsuit confirming the invalidity of the seizure of the Osan forest land that "confiscation enforcement can no longer be carried out due to the death of the former president."
The court stated, "The Public Official Crime Forfeiture Act does not provide separate provisions regarding forfeiture or confiscation enforcement against the offender or others when the offender who committed a specific public official crime dies. Therefore, according to the general principle of enforcement of property penalties, enforcement cannot be carried out against the offender, nor can confiscation enforcement be carried out against others under the Public Official Crime Forfeiture Act."
Therefore, the 5.5 billion won currently under litigation is effectively the last confiscation fund that the state can recover following the former president's death.
The former president was sentenced to life imprisonment and a confiscation of 220.5 billion won by the Supreme Court in 1997 on charges including rebellion and bribery.
So far, 128.22 billion won has been recovered, and except for the 5.5 billion won currently under litigation, the remaining 86.7 billion won cannot be recovered unless retroactive legislation is enacted.
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