A senior official at the Construction Workers Mutual Aid Association, which manages assets worth 5 trillion won, was caught by the Board of Audit and Inspection for receiving bribes worth hundreds of millions of won as part of an investment scheme that he pursued through a company held under someone else's name.
According to an audit report titled "Management and Oversight of Alternative Investments by Major Pension Funds and Others" released by the Board of Audit and Inspection on the 27th, Deputy Minister Lee received 200,000 euros (2.6 billion won based on the exchange rate at that time) as a "consulting fee" from a local broker after the mutual aid association decided to invest 30 billion won in a logistics center in Spain in 2019.
Deputy Minister Lee received the money through a corporation established under someone else's name, which transferred the funds to the brother-in-law of Deputy Minister Lee in the form of art transactions. The brother-in-law then sent the money back to Deputy Minister Lee's wife. This was a form of money laundering disguised as art transactions. The Board of Audit and Inspection explained, "The artwork subject to the contract was already in Deputy Minister Lee's house."
Deputy Minister Lee registered the company with the Financial Supervisory Service as a fund management company (GP) in 2022 so that the company under someone else's name could directly manage the fund created with the mutual aid association's funds.
In the process, Deputy Minister Lee also issued a false investment confirmation document in the name of the mutual aid association's chairman. He had subordinates illegally use the corporate seal of the mutual aid association on the investment confirmation document, which was then submitted to the Financial Supervisory Service for registration as a GP.
The representative of the company was a friend of Deputy Minister Lee, and Deputy Minister Lee's wife also worked as an employee. It was revealed that Deputy Minister Lee's wife received an annual salary of 40 million won after taking a job at the company.
Last year, Deputy Minister Lee attempted to inject mutual aid association funds into a company producing wood pellets in South Gyeongsang Province, with which he had a vested interest, but investment reviews were halted as the audit by the Board of Audit and Inspection began.
Deputy Minister Lee also violated internal regulations stating that "employees responsible for asset management cannot engage in stock trading."
From 2020 to 2022, Deputy Minister Lee utilized insider information to purchase shares of listed and unlisted corporations that the mutual aid association invested in under the names of his spouse and children, as well as his mother.
It was confirmed that the shares traded by Deputy Minister Lee, mobilizing personal and family accounts, amounted to at least 2.6 billion won.
The Board of Audit and Inspection demanded that the chairman of the Construction Mutual Aid Association dismiss Deputy Minister Lee and also requested an investigation into him by the prosecution.
The Board of Audit and Inspection stated, "Mr. A pursued personal gain using his position at the mutual aid association for years, and during the audit period, he displayed an attitude of, "Didn't the mutual aid association not actually invest?" regarding the review of the wood pellet business investment, showing no remorse for his wrongdoings. Instead, he was consistently dishonest in his statements."
They pointed out that "as an institution that manages funds for construction day laborers, who face relatively poor working conditions and income levels, and unstable employment, there is a high level of public responsibility required, yet Deputy Minister Lee used the contributions for personal gain, showing a serious level of misconduct."
The mutual aid association reportedly responded, "We plan to take action according to laws and regulations" in relation to this incident, according to the Board of Audit and Inspection.