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Representative of investment firm at Covana office has a 'peculiar connection' to President’s mother-in-law

[비즈한국] In 2021, the Yangpyeong Gongheung District development project, led by ESI&D, a company owned by President Yoon Suk Yeol's in-laws, became mired in controversy over preferential treatment. Following the controversy, Yangpyeong County corrected the development impact fee from the original 0 won and retroactively imposed approximately 180 million won. Public officials in Yangpyeong County who retroactively granted the project permits were indicted and are currently on trial.

However, it has been confirmed that a Busan-based company that invested in the Gongheung District development at the time is linked to an investment firm currently occupying the Covana office (Related article: [Exclusive] Representative of investment firm in former Covana office was head of 'Covana Partners Hong Kong'). According to Bizhankook’s reporting, the son of the representative of the Busan company that filed the lawsuit at the time is the current head of the investment firm residing in the Covana Contents office. What is their relationship, and what exactly happened?

Busan Company A signed investment agreement in 2009 and wired 800 million won

It was in July 2009 that Busan-based Company A wired 800 million won to Choi, the mother-in-law of President Yoon Suk Yeol. According to the court ruling, First Lady Kim Keon-hee encouraged a person named B to invest in the Gongheung District development project in May 2009. Subsequently, Company A, where B's father, C, served as CEO, signed an investment agreement to invest 800 million won in exchange for a portion of the project's profits. The investment funds were used by Choi, the President's mother-in-law, to purchase 2,585㎡ (approx. 782 pyeong) of forest land, which served as the site for the Gongheung District development.

Problems between them arose after that. In May 2013, before any profits from the Gongheung District development project had been generated, Company A received a full refund of its 800 million won investment. Later, Company A argued that it was entitled to a 9.8% share of the project's profits based on the agreement. Choi, however, countered, "The agreement was terminated by returning the 800 million won, and no profit-sharing agreement was ever signed."

In August 2015, Company A filed a civil lawsuit against Choi, demanding payment of 1,014,028,366 won. However, the court ruled in favor of Choi. The court reasoned that at the time Choi returned the 800 million won in May 2013, the development plan for the Gongheung District had not yet been approved, meaning no profits existed. Company A also submitted a text message to the court sent by Choi on May 22, 2015, stating, "It is not yet time to settle the accounts," but this was not accepted.

The second trial court also ruled in favor of Choi, determining that due to the real estate market downturn at the time, ESI&D had accumulated losses reaching 2.4 billion won, and Company A, being aware of this, had withdrawn from the investment relationship. The ruling stated, "B was frequently interacting with the defendant's daughter, Kim Keon-hee, at the time, so it appears B was aware of these circumstances."

Company A appealed to the Supreme Court, but in October 2018, the Supreme Court upheld the lower court's decision.

Company A was established just before the investment and liquidated after receiving the refund

Company A was established in June 2009 with its headquarters in Busan. With a capital of 350 million won, its business objectives included real estate development and wholesale/retail of general merchandise. This was just one month after First Lady Kim Keon-hee encouraged B to invest. In July, the month after its establishment, Company A wired 800 million won to Choi.

In May 2013, Company A received the 800 million won back from Choi and filed for dissolution about a month later, in June. It could not be determined what business, if any, Company A actually conducted. The address of Company A, headquartered in Busan, was identical to the residence of its representative, C. C still lives at this address today. C was the sole registered director of Company A.

An interesting point is that C's son, B, is currently the representative of an investment firm occupying an office in the basement shopping center of Acro Vista, which is owned by the First Lady's family company, Covana Contents. According to a disclosure by LS Eco Energy229640, B served as the representative of Covana Partners Hong Kong from 2011 to 2016. To date, no information about Covana Partners Hong Kong has been made public.

Bizhankook visited C in Busan, but C refused to be interviewed, asking, "Why are you asking about something from 10 years ago?"

Local residents were unaware that C had operated Company A. A resident who has known C for a long time said, "I had no idea he operated a real estate company. He used to be a manager at a famous hotel, and he now lives off the rent from a nearby studio apartment."