Nexon Chairman Kim Jung-ju summoned for the second time

It has turned out that NXC Corp. Chairman Kim Jung-ju has been accused of more than 30 prosecution cases and freed from most of the charges. In 2002 when Kim was charged with embezzlement of research fund and breach of duty, he was acquitted from the charges by senior prosecutor Jin who went to the same university with Kim. In 2006 when an investigation was made for Ocean Story, Nexon invested thousands of millions Korean won (approx. hundreds of thousands U.S. dollars) in a company that created the gaming program but was not investigated at all. Taking over a gaming corporation N-Doors, shareholders who suffered a financial loss while company’s stocks were cut by one-ten-thousandth accused of him in 2010 and in the following year, he was investigated again when the information of 1,320 members of Maple Story was leaked but was acquitted without any charges. During this period, senior prosecutor Jin worked for Ministry of Justice and Supreme Prosecutor’s Office.

Kim suffers discredit for providing money for overseas trips that Jin enjoyed with his family and acquaintances. The prosecution must delve into the reasons Kim maintained close relationship with Jin and what kind of payment Kim made for Jin. Given speculative features of gaming industry, it is highly likely that Nexon made other connections with second and third prosecutors.

Suspicion is also growing over real estate transactions of Woo Byeong-woo, senior presidential secretary for civil affairs and his in-laws. It’s all too doubtful why he signed a contract for the land in ownership dispute by delaying the date for balance settlement and then sold the property only nine month after the purchase at the loss of 3 billion Korean won (approx. 2.64 million U.S. dollars). Even though the purchase price (132.6 billion won or approx. 117 million dollars) was more than 10 percent of yearly sales of the company, Nexon repeatedly said that chairman Kim was not involved in the transaction.

When the suspicion was first raised, Kim kept changing his testimony from “I don’t know anything as that was a personal transaction (March)”, “I lent some money and was paid back (June)” to “I gave it for free without anything in return (July).” He is just like other vicious enterprisers who make excuses behind the company without making direct explanation.

Not alone living up to its size of 2 trillion won (approx. 1.76 billion dollars) in sales, Nexon has maintained a one-person management system. Its holding company NXC is more than 90 percent owned by affiliate persons such as his wife. On top of this, relations with Nexon Japan make its ownership structure all too opaque. Only Kim along with a very few people in the management have the knowledge of how the company is run. The prosecution is strongly advised to impose a fitting punishment for law manipulation in running his firm and for the corruption that lies behind the success story of venture companies.

허문명논설위원 angelhuh@donga.com