Five people were indicted for misusing 12.3 billion won ($12 million) provided by an online game company hoping to enter the digital publishing and education markets, prosecutors said Sunday.
Dragonfly GF Co., which runs the online first-person shooter game Special Forces, gave the investment funds to a suspect identified by his surname Chung who claimed to be an executive of a local publisher.
He claimed to hold the rights to famous foreign book brands and education content in the Korean market.
But Chung and three others spent more than 10 billion won of the investment on paying off private debt and buying drinks at local bars, prosecutors said. A fifth suspect only identified by his surname Ahn, who is an outside director for Dragonfly, was also indicted for authorizing Dragonfly’s payments to Chung.
Chung told Ahn he would use Dragonfly money to buy books from Franklin Watts, a subsidiary of Scholastic Classroom and Library Group, a U.S. company.
Chung also said he held importing rights to books written by acclaimed New Zealand children’s book writer Joy Cowley. The imported books would be sold to domestic English language hagwon, local private education institutions, Chung had told Dragonfly executives.
Chung had also told investors his publishing company was developing books adapted to Accelerated Reader, a software that measures students’ reading levels.
“(The suspects) almost got away by selling off their investors with stories about famous foreign brands and the growth of the English education industry,” a prosecutor said.
“It’s a shame they’ve used up most of the funds, making reimbursements (to Dragonfly) impossible.”
A trial date has not been set.
By Jeong Hunny (email@example.com)