Police received complaint in February and have completed search and seizure at suspect's home and office
Police said Monday they have completed a search and seizure operation targeting a former president of LG Energy Solution who is suspected of causing financial losses to the company by directing payments of large consulting fees to a Chinese firm connected to his family. They plan to conduct further investigation after analyzing the seized materials.
Ko Beom-seok, commissioner of the Seoul Metropolitan Police Agency, made the announcement at a regular press briefing held Monday morning at the agency's office in Jongno-gu, Seoul. "We received a complaint in February and the financial crimes investigation unit has been conducting a probe," Ko said. "We have completed our interview of the complainant and are analyzing the submitted materials."
Ko added that investigators had also carried out one round of search and seizure against the suspect. "We will analyze the remaining materials and conduct any additional investigation as needed based on the results," he said.
Asked whether associates had been summoned for questioning, Ko said that had not yet happened. "We are currently analyzing the materials secured through the search and seizure, and once the analysis is complete, we will move to the next step," he said.
The case stems from allegations that a former LG Energy Solution president, identified only by his surname Lee, caused losses of about 10 billion won ($7.45 million) to LG affiliates over roughly a decade by arranging consulting fee payments to a Chinese firm linked to his family.
Four LG affiliates — LG Energy Solution, LG Display, LG Chem and LG Management Development Institute — conducted internal audits based on a whistleblower tip and filed a complaint with police in February, accusing the former president of breach of fiduciary duty.
The contract at the center of the case was signed around 2010, when LG was pursuing investment in liquid crystal display production facilities in China. LG entered into the agreement with the firm to receive consulting services on local government permits and approvals in China. The firm is reported to have been established by a Korea-China economic exchange organization whose Korean representative was a family member of the former president.
The consulting fee was set at around $20,000 per month, and the contract continued until around the time the former president retired in 2023.
Police recently searched the former president's home and office, seizing his mobile phone and other relevant materials. Investigators are examining whether the firm actually performed consulting work, tracing the flow of funds, and looking into whether the former president was involved in the contract approval process.
Meanwhile, the former president has denied the charges, saying the consulting contract was legitimate and that the firm delivered tangible results, including securing local permits in China.
kido@heraldcorp.com
