Dulwich officials indicted for embezzlement

Dulwich College Seoul in Banpo, southern Seoul / Korea Times file

By Lee Kyung-min

The prosecution said Tuesday that it had indicted key officials of Dulwich College Seoul Limited (DCSL) on charges of embezzling 7.5 billion won ($6 million) in school tuition fees to a paper company set up in Hong Kong.

The Seoul Central District Prosecutors' Office said it has indicted three board members _ the school’s dean, surnamed Lee, 48, her husband, surnamed Geum, 50, and the chief executive officer (CEO) of the paper company set up in Hong Kong, whose identity is being withheld, 45.

The indictment against the company CEO, whose identity is being withheld, has been delayed as he is staying overseas outside of Korean jurisdiction.

The three are suspected of using the embezzled money to pay off loans and other expenses from 2010 to 2015.

The three took out the loans to fund the construction of the international school’s Seoul branch in Seocho district, southern Seoul.

Part of the money was diverted in the name of paying franchise fees to the paper company, according to the prosecution.

The school has been de facto operated by a for-profit corporation located on the Cayman Islands. To establish the Seoul branch of the school, the corporation set up a nonprofit paper company in Hong Kong, disguising it as a non-profit entity.

Under the private school act, only nonprofit organizations can run international schools in Korea.

The indictment comes a few months after prosecutors raided the school in Seocho and confiscated school management records and bank statements.

Legal representatives of DCSL said the indictment was groundless.

“From the beginning of its operation in Korea, DCSL has done everything it could to comply with Korean laws and be transparent about its operation. Regarding the establishment and operation of the School, DCSL has always consulted diligently with its professional advisors such as Lee & Ko, PwC and KPMG to confirm that it has complied with Korean laws.

“DCSL and its legal counsel are confident that DCSL will be vindicated and cleared of all counts of indictment. The School will be operated in the same manner as usual and DCSL will do its utmost to minimize the effect this process has on the operation of the school or the students in its care.”

Opened on Sep. 2, 2010, DCSL has been one of the most desired schools among wealthy Korean parents. Annual tuition for the school was reportedly around 28.2 million won ($24,260) as of 2014.

The Seoul-branch of the school, which can accommodate up to 700 students, currently has 592 students enrolled in the academic program. Of them, 25.5 percent are Korean students.

An official at the Seoul Metropolitan Office of Education said, "The educational authorities will take necessary measures against the school according to court rulings.