Corporate Investment Amid Capital Erosion
Focus on Allegations of Quid Pro Quo
The special prosecutor team led by Min Jungki, which is investigating the so-called "Butler Gate" allegations related to First Lady Kim Keonhee, summoned Cho, the CEO of IMS Mobility, for questioning on August 2. The special prosecutor team accelerated its investigation after conducting raids the previous day at eight locations, including the offices of IMS Mobility, HS Hyosung, Oasis Equity Partners, and the homes of key individuals.
Cho appeared at the special prosecutor's office in KT Gwanghwamun Building West, Jongno-gu, Seoul, at around 9:26 a.m. that day. He claimed, "The 70 billion won investment in IMS Mobility was made possible solely by our technological capabilities and the efforts of our employees, without any external intervention." At the same time, Min, CEO of the private equity firm Oasis Equity Partners, was also summoned and questioned. However, Min did not respond to reporters' questions about the legality of the investment process or whether First Lady Kim Keonhee was involved. Both individuals are reportedly suspects on charges of breach of trust in the course of their duties.
IMS Mobility is a company in whose establishment Kim Yesung, known as the "butler" of the First Lady, was involved. In 2023, IMS Mobility received an investment of 18.4 billion won through Oasis Equity Partners from Kakao Mobility, HS Hyosung, and Shinhan Bank, among others. At the time, the company was in a state of capital erosion, with its liabilities (141.4 billion won) far exceeding its net assets (56.6 billion won). The special prosecutor team is focusing on the possibility that these companies may have provided funds in exchange for favors, considering the close relationship between Kim Yesung and First Lady Kim Keonhee.
Of the investment funds, 4.6 billion won was used by Innovest Korea to purchase existing IMS Mobility shares held by Kim Yesung. Kim Yesung's spouse, Jeong, is listed as the sole internal director of Innovest Korea, raising suspicions that Kim Yesung is the actual owner of the company under a borrowed name. It is reported that during questioning on July 23, Jeong admitted that Kim Yesung is the real owner of Innovest Korea.
Kim Yesung left for Vietnam in April and is currently staying there. The special prosecutor team has initiated procedures for an Interpol Red Notice to secure Kim Yesung's custody. It is also reported that the search and seizure warrant listed Kim Yesung, Jeong, and Cho Hyunsang, Vice Chairman of HS Hyosung, as suspects on charges of breach of trust in the course of their duties.
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