Court rules against return of extorted scholarship assets

Acknowledges foundation snatched by the Park Chung-hee regime


By Bae Ji-sook

A local court ruled on Friday that the assets of a scholarship foundation extorted by the late President Park Chung-hee government in the early 1960s should not be returned to the family of the late founder of the scholarship.

The court, citing the expired period for legal challenge, rejected the request for the return of the extorted assets, though it did acknowledge that the assets had been taken under duress by Park’s authoritarian regime.

The assets are now under the control of a renamed scholarship foundation, which was once managed by ruling party leader and Park’s eldest daughter Park Geun-hye. Her opposition rivals have raised the issue of her involvement in the scholarship.

In 1962, the Park government extorted the Bu-il Scholarship from its founder Kim Ji-tae while cracking down on collaborators with the Japanese during the colonial rule from 1910-1945. Kim worked at a colonial company, amassing a fortune, and founded the Bu-il Scholarship in 1958.

Days after the extortion of the Bu-il Scholarship, it was renamed the May 16 Scholarship controlled by Park’s aides, and renamed again in 1982 the Jeongsu Scholarship after Park Chung-hee and First Lady Yook Young-soo. May 16 is the day of Park’s successful coup d’etat.

In June 2010, Kim Ji-tae’s eldest son Kim Yeong-goo and other relatives sued the government and the Jeongsu Scholarship, asking for the return of its assets. The Jeongsu Scholarship Foundation owns 30 percent of broadcaster MBC, all of the Busan Ilbo newspaper, a 2,385-square meter lot used by a Seoul-based newspaper, the Kyunghyang Shinmun, and about 20 billion won ($18 million) in financial assets.

The court, rejecting request for the return, acknowledged that the military junta led by Park Chung-hee coerced Kim Ji-tae into making the “donation,” as the junta claimed, but said the threats it used to extort them were not severe. 

“We do not think that Kim was deprived of all means to express his resistance at that time,” said Judge Yeom Won-seob who presided over the trial. “Also, the statute of limitations to make a legal challenge has expired, along with the right to demand compensation from the government,” he added.  

In 1962, on the surface, Kim donated his assets, including the Bu-il Scholarship, to society, when he was detained as a collaborator. He signed a donation memorandum and was released. The prosecution did not press charges.

In 2007, the Truth and Reconciliation Commission acknowledged that he signed the note under months of duress. The commission also advised his bereaved families to demand a “refund” from the government.

Kim Yeong-woo, the second son of Ji-tae, said on Friday he would appeal the court’s decision. 

“What I cannot stand is a few people from the old regime still peddling influence in scholarship affairs,” Kim told reporters as he walked out of the courtroom. “For the honor of my father, I will take the case all the way to the Supreme Court,” he said. 

On the political front, Jeongsu Scholarship has emerged as a thorny issue in the run up to this year’s elections, for Rep. Park, a presidential frontrunner with the Saenuri Party.

She served as a part-time director of the Jeongsu Scholarship between 1995 and 2005. The foundation is now run by Choi Phil-lip, 84, a former aide to the late President Park.

Moon Jae-in, a strong presidential hopeful of the opposition, claimed that Park embezzled from the foundation fund by taking a salary of 250 million won a year as its director, despite hardly showing up at the office. Moon also said it was inappropriate for “her cronies” to govern the scholarship foundation since the organization is supposed to be a public institution. 

“It is like Park Geun-hye and her friends are keeping stolen goods,” he said. 

Park said her payment and Choi’s leadership in the foundation were legitimate. She also stressed that she currently has nothing to do with the foundation.

By Bae Ji-sook (baejisook@heraldcorp.com)