Kyung Hee Hagwon argued it had no supervisory duty, but prosecutors found evidence of regular business reporting and indicted both parties
By Yang Geun-hyuk, The Herald Business
The former head of a pharmaceutical company that supplied herbal medicine to a prominent university's Oriental medicine hospital, along with the school foundation that owns it, have been indicted on charges of manufacturing and selling 8.4 tons of illegal herbal medicine worth about 400 million won ($259,000).
The third criminal division of the Seongnam branch of the Suwon District Prosecutors Office (chief prosecutor Eom Yeong-uk) indicted the former head of Kyung Hee Hanyak, identified only as A, and the school foundation Kyung Hee Hagwon without detention on June 11 on charges of violating the Pharmaceutical Affairs Act. Kyung Hee Hanyak is a company the foundation established in 2005 to supply herbal medicine to the Oriental medicine hospital affiliated with Kyung Hee University's College of Korean Medicine.
According to prosecutors, A and Kyung Hee Hagwon manufactured 12 varieties of herbal medicine totaling about 8.4 tons between July 2015 and November 2021 without obtaining manufacturing and sales permits or filing the required notifications with the Ministry of Food and Drug Safety, and sold those products for a combined 394 million won.
The Seoul Regional Food and Drug Safety Office referred the case involving Kyung Hee Hagwon to the Ministry of Food and Drug Safety in February 2023, and the ministry forwarded it to prosecutors in July of that year.
Prosecutors then conducted their own supplementary investigation. A confessed to the offenses, but Kyung Hee Hagwon argued that because Kyung Hee Hanyak managed the manufacturing and sales of herbal medicine on its own, the foundation bore no supervisory duty over those operations and therefore could not be held liable.
Prosecutors rejected that argument, concluding that Kyung Hee Hagwon had directly established Kyung Hee Hanyak and that profits from its operations flowed back to the foundation. Under the dual-liability provision of the law, prosecutors said, the foundation must bear responsibility.
Additional grounds for the indictment included the fact that A was formally employed by Kyung Hee Hagwon and seconded to Kyung Hee Hanyak, with his salary paid by the foundation. A also told prosecutors he had reported all matters to Kyung Hee Hagwon, including the procedures for obtaining permits for the unlicensed herbal medicines.
Prosecutors also confirmed that Kyung Hee Hanyak and other revenue-generating units of Kyung Hee Hagwon had submitted weekly business reports to the foundation. Taking all of these circumstances together, prosecutors concluded that, contrary to the foundation's claims, Kyung Hee Hagwon had continuously exercised internal oversight over Kyung Hee Hanyak.
yg@heraldcorp.com
