Police raid POSCO E&C over electrocution accident involving Myanmar worker
The worker in his 30s was checking water pumps at an expressway construction site in Gwangmyeong, just southwest of Seoul, on Aug. 4 when he apparently got an electric shock. He has yet to regain consciousness.
Around 70 police and labor ministry officials raided the headquarters of contractor POSCO E&C in Incheon, west of Seoul, and the Seoul office of a subcontractor to seize relevant documents and files.
President Lee Jae Myung has vowed tough action against fatal industrial accidents.
Last week, he singled out POSCO E&C over repeated fatal accidents at its labor sites and instructed his aides to consider revoking the company's construction license and excluding it from public bidding. (Yonhap)
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Korea Herald
36 minutes ago
- Korea Herald
Korea rethinks breach of trust, its most serious corporate crime
Critics say vague rules, tough sentences chill investment, while others warn full repeal could enable abuse South Korea's criminal punishment for breach of trust is back in focus after lawmakers broadened directors' fiduciary duty beyond the company to include shareholders. The change, part of a Commercial Act amendment passed in July, has fueled concerns in the business community that it could open the door to excessive liability and criminal charges over disputed management decisions. In response, President Lee Jae Myung launched a task force on 'Rationalizing Economic Criminal Penalties,' with revision of breach of trust at the top of its agenda. 'A business misstep in Korea can land you in prison, and that chills investment,' Lee said. 'We must ask whether layering criminal sanctions, on top of economic and financial penalties, for breach of trust aligns with global norms.' Against global norms? Breach of trust applies when executives or employees violate their duty of good faith for personal gain or cause losses, and Korea is among the few countries to treat it as a crime with some of the toughest penalties. Korea regulates breach of trust under three statutes. The Criminal Act covers general and occupational cases, while the Commercial Act adds 'special breach of trust,' punishable by up to 10 years in prison or a 30 million won (about $22 million) fine. For cases exceeding 5 billion won, the Act on the Aggravated Punishment of Specific Economic Crimes mandates at least five years in prison — the same minimum as for murder. Japan, Germany and France also criminalize breach of trust but apply it far more narrowly. Germany shields executives under a 'business judgment rule,' while Japan and France limit liability to cases with clear intent or misappropriation. The UK and US have no equivalent statute; instead, they rely on fraud or embezzlement laws, with civil courts settling most disputes. 'In Korea, even the owner of a one-person company can face criminal charges for using a corporate card on personal expenses,' said Kim Woo-jin, a business professor at Seoul National University. 'In the US, the same act would be neither a crime nor a civil case since you cannot sue yourself. Serious breaches should be punished, but much of this belongs in civil law. Korea treats it too harshly as a crime, with prosecutors wielding disproportionate power.' Korea's statute leaves 'act in violation of duty' undefined and applies broadly to any property benefit, subjecting even good-faith decisions that result in losses to scrutiny. Moreover, anyone can file a complaint, making annual cases top 2,000. Yet, roughly about one in 10 indictments results in a conviction, fueling criticism that prosecutors overreach, particularly against conglomerates. Samsung Electronics Chairman Lee Jae-yong was cleared in February over a 2015 merger, ending a decade-long case. Hanwha's Kim Seung-youn, CJ's Lee Jay-hyun and former KT chief Lee Suk-chae have also had charges dropped or sentences reduced after courts could not prove them guilty. Justice Minister Jung Sung-ho recently warned against prosecutorial overreach. 'Prosecutors have been criticized for fostering risk aversion by applying hindsight judgments to strategic decisions,' he said in his July inaugural speech. 'Such caution risks weakening management and slowing decision-making.' Even Lee Bok-hyun, former Financial Supervisory Service chief who once pursued high-profile breach-of-trust cases as a prosecutor, has argued the law "unjustly exposes all boardroom choices to criminal liability," a regime found nowhere else, he emphasized. "Management decisions to be resolved in the boardroom, not the courtroom," he said. Abolishment too premature At the time, Lee, the former FSS chief, argued the law could be repealed if directors' fiduciary duty were extended to shareholders, a change enacted in July. The amendment reignited calls within the corporate sector for scrapping breach of trust altogether. Yet while many agree the law needs significant reform, some remain cautious, warning full repeal is risky in Korea's conglomerate-dominated corporate environment, where large-scale abuses — especially self-dealing or third-party favoritism — could go unchecked. 'Many breach-of-trust cases arise from asset transfers between affiliates,' said lawyer Cheon Joon-bum, vice chair of the Korean Corporate Governance Forum. 'It's often difficult to determine whether such capital shifts were made in good faith for both the investing and receiving firms. In many instances, one company bears losses to support another, leaving unrelated stakeholders exposed.' Professor Kim also warned that abolition is premature, noting it could leave controlling shareholders' unfair decisions against minorities unchecked, even when losses are not immediate. Cheon went further, arguing that the problem lies in execution. 'Only about 10 percent of indicted cases end in conviction, not because there was no wrongdoing, but because prosecutors couldn't prove it,' he said. 'In the US, cases that can't be proven wouldn't even begin. Here, they drag on for years, only to end in acquittal. That's a loss not only for genuinely innocent companies, but for the credibility of the judicial system.' Experts point to the "business judgment rule,' used in Germany and the US, as a way forward. 'The key is ensuring fairness for all stakeholders. The rule shields directors when decisions affect all shareholders equally, even if the company incurs losses,' said Cheon. The government and ruling party are moving to embed the rule in the Criminal Act, with Democratic Party of Korea lawmaker Kim Tae-nyeon already tabling a related bill. Yet Korea's breach-of-trust law is especially difficult to enforce because regulators, not boards, must prove misconduct. 'Regulators, as outsiders, struggle to obtain the documents needed to challenge management decisions. That burden makes it difficult to hold executives accountable and leaves most questionable transactions unpunished,' Cheon said. He stressed that easing criminal penalties must go hand in hand with stronger civil remedies. In the US, boards bear the burden of proving a deal's fairness in civil suits; in Korea, regulators shoulder it. Experts emphasize that legal reform alone will not suffice. 'Korea needs not only statutory change but also clearer internal procedures to prevent shareholder losses,' said Cheon. He pointed to Germany's "Konzern" system, which obligates corporate groups to safeguard minority shareholders in affiliate transactions before proceeding. Professor Kim added that Korea's recently expanded fiduciary duty to shareholders will remain hollow without a more active litigation culture. 'In the US and Europe, shareholder suits serve as routine checks on management. A comparable level of shareholder-driven litigation must take root in Korea as a precondition for easing breach-of-trust laws," said Kim. The government plans to unveil by year-end a reform package to 'rationalize' economic criminal penalties, including breach of trust. Urgent measures will be submitted to the National Assembly in September, with additional proposals finalized by year-end and aimed for passage in the first half of 2026.
Korea Herald
3 days ago
- Korea Herald
Traffic control, 6,500 police slated for president's belated inauguration in Seoul
South Korean police will mobilize some 6,500 officers across Seoul on Friday, as thousands are expected to attend President Lee Jae Myung's inauguration and Liberation Day ceremonies around Gwanghwamun Square. Around 102 units of the local SWAT teams will be dispatched as a precaution against protests expected to be held across the nation's capital. The Seoul Metropolitan Police Agency has enacted partial traffic controls in the surrounding areas since Tuesday. Two lanes on both sides of the road from the rotary in front of Gyeongbokgung to the intersection at the south end of Gwanghwamun Square will be closed off until 8 p.m. Saturday. The inauguration ceremony will be held at 8 p.m. Friday as the highlight of the commemoration slated to start around 10 a.m. All lanes from the Sejong-daero intersection to City Hall Square will be under police control from 7 a.m. to 3 p.m. on Friday, and the traffic control of the area around Gwanghwamun Square will be implemented until 8 p.m. on Saturday. The police recommended that the public use the subway when passing through the areas. Traffic will also be controlled in parts of Yeouido from 2 p.m. to 7 p.m. Friday, including on Wonhyo Bridge heading north and Hangang Bridge heading south. Officials advised residents to seek alternate routes when passing through these areas. For real-time information on the roads under traffic control, check the homepage of the Seoul Transport Operation and Information Service. Officials on alert to prevent disturbance The measures are implemented to prevent possible disruptions to the ceremonies, as some 70 rallies have been reported to the authorities to be held near Gwanghwamun on Friday. Among them is a rally of some 10,000 participants hosted by controversial far-right pastor Jeon Kwang-hoon at Seoul Station — a little over 3 kilometers from Gwanghwamun Square. Though it is scheduled to conclude before the inauguration, concerns have been raised that some participants may cause disturbances. Jeon is among the vocal opponents of the liberal President Lee, and is currently under investigation for instigating a January attack by disgraced former leader Yoon Suk Yeol's supporters on a Seoul court. Supporters on the liberal side have also reported holding protests around the time of the inauguration ceremony. Police officials told local media outlets that SWAT members from other regions, such as Gyeonggi Province, will be mobilized for security during the ceremonies. The roofs of the high-rise buildings around Gwanghwamun will be sealed off Friday, and officials will be on the lookout for any unauthorized drones flying around the area.
Korea Herald
3 days ago
- Korea Herald
Man who shot son to death indicted on charges of murder, attempted murder
A man accused of shooting his son to death and attempting to kill his daughter-in-law and two grandchildren was indicted Thursday on charges of murder and attempted murder, prosecutors said. The man in his 60s was arrested last month on charges of killing his son with a homemade gun during his own birthday party at the son's home in Incheon, west of Seoul, on July 20. Authorities later said he was also suspected of trying to kill his daughter-in-law, his two grandchildren and a foreign private tutor acquainted with the daughter-in-law, who were at the party. At his home in Seoul's Dobong district, police found multiple explosive devices that had been set to go off the next day. The Incheon District Prosecutors Office said it indicted the man on charges of murder, attempted murder, a violation of the firearms control law and attempted arson. Prosecutors determined the suspect meticulously planned the crimes in advance, starting in August last year, by watching related YouTube videos and purchasing gun parts. As a motive for the crimes, they identified his apparent paranoia that his ex-wife and son were isolating him after providing him long-term economic support. (Yonhap)
