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Dept. Office of Property Investigation Date 19/01/2010
File The_KDIC_Traces_Concealed_Properties_of_Parties_Accountable_for_a_Financial_Institution.doc
Subject The KDIC Traces Concealed Properties of Parties Accountable for a Financial Institution¡¯s Failure to Redeem Injected Public Funds
  • The KDIC Traces Concealed Properties of Parties Accountable for a Financial Institution¡¯s Failure to Redeem
    Injected Public Funds.

    Operation of Concealed Property Report Center

    The KDIC launches thorough investigations into and traces properties concealed by parties who are part
    responsible for the failures of financial institutions in order to alleviate the burden on the public brought about
    by the injection of public funds into such institutions.

    Investigations can be launched into properties of former management and/or employees of failed financial
    institutions and default debtor corporations. Once the properties are found, immediate steps are taken to
    secure the properties and redeem it to recover costs.

    To perform these tasks, the KDIC launched the ¡®Concealed Property Report Center¡¯ of parties accountable for
    the failure of a financial institution under the Insolvency Investigation Division headed by Mr. Lee Joong Hwan,
    the managing director.

    When concealed properties are redeemed, the KDIC pays a monetary reward of up to 500 million KRW to the
    person who provided information of the concealed properties. The personal information of such informant is
    kept confidential.

    During its operation, a total of 137 cases were reported to the center, and 27.2 billion KRW was redeemed in 21
    cases and 1.25 billion KRW was paid to informants.

    Thorough Investigation into Properties Concealed Overseas by Expanding the Investigations to other Countries

    Prior to 2010, the KDIC only investigated properties concealed in the United States. To more thoroughly
    investigate properties concealed overseas, the KDIC expanded its investigations to other regions including
    Canada, Japan, and Australia from 2010.

    It selected 600 people who are highly probable to have concealed properties overseas, and commissioned
    professional firms which specialize in investigations into hidden overseas assets, to find and report on such
    assets.

    Since 2007, the KDIC has chosen the United States as a preferred country to be investigated, and launched
    investigations into 900 parties who are responsible for the failures of financial institutions based on immigration
    and money transfer records. Consequently, 12 lawsuits (amounting to 53 million USD) were filed against
    responsible parties to apply for transfer of the cases from the countries where the properties were concealed
    to Korea.

    Diversifying the channels to publicize the investigation into concealed properties for effective investigation

    As the KDIC recognizes public interests and reports are crucial in procuring quantitative and qualitative
    information on the concealed properties, it is diversifying the publicizing activities of Concealed Property
    Report Center both home and abroad.

    For example, domestically, in order to enhance cooperation with the relevant organizations and thereby more
    effectively publicize the Report Center, the KDIC¡¯s Report Center is now linked to the ¡®Overseas Tax Evasion
    Report Center¡¯ which is operated by the National Tax Service online.

    As a part of the Corporation¡¯s efforts in publicizing the center to the public overseas, the Corporation posted a
    link on the Korean community internet homepage to and delievered presentations to explain the functioning of
    the concealed property report center. Also, to enable easy accessibility to the investigation into concealed
    property and the report center, the KDIC has launched a toll free number for Korean residents in the United
    States and Canada to report any concealed properties 24 hours a day.

    Future Investigation Plans

    The KDIC will periodically monitor the culpable parties who frequently make visits and transfer money
    overseas. Also, it will expand its investigations to more regions including the South East Asian region, and
    increase the number of staff conducting the investigations.

    By enhancing the cooperation between the KDIC and relevant organizations such as the National Tax Service,
    it will maximize the efficiency of investigations into properties concealed overseas.

    By consistently and thoroughly conducting investigations into concealed properties of the relevant parties, it
    will more strictly hold culpable parties accountable for losses they caused and at the same time contribute to
    the establishment of financial order in a sound manner.

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