Prosecutors grill Cho Kuk’s brother over foundation

Prosecutors grilled Justice Minister Cho Kuk’s younger brother on Thursday over alleged irregularities involving the Cho family’s private school foundation.

Cho’s brother left the Seoul Central District Prosecutors’ Office at around 11:40 p.m. Thursday after more than 13 hours of questioning about the lawsuit he and his ex-wife filed against Ungdong School to collect receivables for a construction project. 

Cho’s father ran the construction firm Goryeo Construction Co. and owned a private school foundation, Ungdong School. Goryeo Construction won a contract from Ungdong School in 1996 to build a new campus for a middle school run by the foundation, and subcontracted it to some 20 firms including Goryeo City Development, which was run by the minister’s younger brother.

Both Goryeo Construction and Goryeo City Development went bankrupt in late 1997 before receiving payment from Ungdong School.

Cho’s brother and his ex-wife sued the foundation twice, in 2006 and 2017, for the unpaid bill. They won as Ungdong School dropped out of the suit. Prosecutors suspect the Cho family might have devised the lawsuit as a means to squeeze money out of the foundation.

Thanks to the lawsuit, Cho’s brother and his ex-wife now have some 10 billion won ($8 million) worth of bonds including interest.

Ungdong School took out bank loans worth 3.5 billion won between 1995 and 1998 for the construction, but Cho’s brother told prosecutors that he did not know where the money went. Prosecutors are looking into whether Goryeo City Development signed a fake contract just to get the bond for the construction costs.

Prosecutors obtained testimony from Ungdong School associates that Goryeo City Development never built a tennis court and other facilities under the contract.

Cho Kuk, who was director of Ungdong School at the time of the first lawsuit in 2006, took part in making the decision to give up the plea. Prosecutors are looking into a possible breach of trust on the minister’s part.

Prosecutors interrogated Cho’s brother on whether his company actually took part in the construction, how the payment was arranged as well as details of the lawsuit.

In response to reporters’ questions Thursday night, the minister’s brother said he had told the prosecution “everything.”

The prosecution plans to summon him again for questioning.

By Kim So-hyun (sophie@heraldcorp.com)