▲ Crude oil spilled off the coast of Taean, South Chungcheong Province, in 2007
A court has ruled that organizations established to recover damages from the 2007 oil spill off the coast of Taean, South Chungcheong Province, must return some 280 billion won in funds.
It was revealed that these organizations barely carried out the public interest projects for which they were established, instead using the funds for operational expenses such as executive and staff salaries.
The Seoul Central District Court's Civil Agreement Division 31 (Presiding Judge Nam In-soo) partially ruled in favor of the plaintiff in a lawsuit filed by the Community Chest of Korea (Fruit of Love) against the West Coast Federation and the Hebei Social Cooperative, seeking the return of distributed funds.
The court ordered the foundation to pay approximately 100.1 billion won and the cooperative approximately 185 billion won to the Community Chest of Korea, respectively.
On December 7, 2007, a crane vessel operated by Samsung Heavy Industries collided with a Chinese-flagged tanker in waters near Taean-gun, South Chungcheong Province, resulting in a spill of 12,547 kiloliters of crude oil.
In February 2016, Samsung Heavy Industries agreed with 11 groups of affected residents to deposit 290 billion won in regional development funds into the Community Chest of Korea, a legal donation organization.
That same year, the victim resident groups established the foundation and the cooperative with the aim of conducting public interest projects, such as revitalizing the local economy, using these funds.
Resident groups from Taean-gun, Seosan-si, Seocheon-gun, and Dangjin-si established the cooperative, while regional groups from Boryeong-si, Sinan-gun, Yeonggwang-gun, Hongseong-gun, Gunsan-si, Buan-gun, and Muan-gun set up the foundation. They received shares of the regional development funds in November 2018.
However, around 2021, criticisms emerged within local communities that the foundation and cooperative were not properly managing the distributed funds, leading to audits by the Ministry of Oceans and Fisheries and the Board of Audit and Inspection.
The audit results exposed various problems, including the improper execution of executive and staff travel expenses, unnecessary borrowing, and delays in forming the delegate assembly.
Subsequently, in August 2023, the Community Chest of Korea notified them of the recall of the remaining distributed funds. As the two organizations objected, a civil lawsuit was filed.
The court accepted virtually all of the arguments put forward by the Community Chest of Korea.
The court pointed out that as of the end of 2021, the foundation's cumulative execution amount stood at 4.6 billion won, accounting for a mere 4.4% of its total distributed funds, and even out of that, 30 billion won was consumed by institutional operating expenses such as personnel costs for executives and staff.
It was also found that as of the same period, the cooperative's cumulative execution amount was 15.8 billion won, or just 7.8% of the total, with 94 billion won spent on institutional operating expenses.
"Rather than completing project objectives within the designated project period, the foundation appears to have operated in a direction where executives and staff exhausted interest income generated from the distributed funds under the guise of personnel expenses and other operating costs," the court explained.
It further noted, "The cooperative's delegate assembly failed to function due to internal strife, and with substantial conflicts existing between the headquarters and its branches as well as internal friction within the headquarters itself, projects could not be properly pursued."
Stating that the business plans of both the foundation and the cooperative were also considerably substandard, the court declared, "The Community Chest of Korea's measure to recoup the distributed funds is lawful."
(Photo: Yonhap News)
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