» Park Geun-hye, presidential hopeful of the Grand National Party

The government and presidential hopeful Park Geun-hye of the main opposition Grand National Party (GNP) are pitted against each other over property once owned by a public foundation and reverted to the national treasury after a military coup in 1961.

The May 16, 1961 coup placed Park's father, military general Park Chung-hee, in power.

Late Kim Ji-Tae, a businessman in Busan, established the Buil Scholarship Foundation, predecessor of the Jeongsu Scholarship Foundation, in November 1958 and delivered scholarships to students in the Busan and South Gyeongsang Province areas. Yeong-u, Kim's son, said, "From 1958 until May 1962 when [my father] handed over the foundation to the military government, 12,364 students had been given scholarship money totaling about 173 million hwan (currency which was used before the currency reform in 1962).

However, the ruling forces who came into power through the military coup confiscated the property of the foundation. After that, they set up 5·16 Scholarship Foundation and handed over the property to it - 5·16 standing for May 16, when the coup to place Park Chung-hee in power broke out. The name of the foundation was then changed to Jeongsu Scholarship Foundation, which was reportedly named after a combination of the first syllable of the given names of Park Chung-hee and the last syllable of that of his wife Yook Yeong-su.

Kim's family members have recently called for the government to return the assets, maintaining that military forces illegally seized the Buil foundation. The government's Truth and Reconciliation Commission on May 29 agreed with the family members, urging the government to return the property to its original owner.

Following the commission's ruling, President Roh Moo-hyun told the prime minister on June 5 that the government must review the measures to implement the commission's recommendation.

In response, Park Geun-hye, who served as head of the Jeongsu Scholarship Foundation for a decade until 2005, said on June 8, "The foundation is not personal property. It already was returned to the public good and is now national property." Choi Phillip, head of the foundation, said, "We have promoted an insolvent organization this much. It was a scholarship foundation in name only, so then what on earth was it robbed of?" However, Kim Yoeng-u, son of the founder of the Buil Scholarship Foundation, dismissed his claim, saying that "If the foundation had been insolvent, why then would the military government try to rob my father of it?"

Kim Ji-tae in 1961 reportedly donated all of his MBC and Busan Ilbo shares as well as 100,147 pyeong (331,000 square meters) of land in Seomyeon, Busan under threat from Park Chung-hee's military government. Those properties were owned by the foundation, funded and run by Kim.

More than four decades after the takeover and renaming of the foundation, the Jeongsu Scholarship Foundation currently holds 30 percent, or 60,000 shares of MBC stock and 100 percent or 200,000 shares of Busan Ilbo stock. The face value of a single MBC stock is 5,000 won, and Busan Ilbo stocks carry a face value of 10,000 won; as both companies are unlisted, the real value of the holdings is hard to evaluate. However, according to stock analysts, the value of the shares owned by the foundation may exceed 500 billion won (US$537.6 million), and in 2005 the National Union of Media Workers estimated the foundation's property holdings to be worth over 1 trillion won in 2005.

The foundation so far has been involved in educational promotion activities funded by earnings from the properties in question. In 2006 alone it paid scholarships worth about 2.6 billion won total to more than 460 college students and 300 high school students. The foundation has been operated mainly by relatives and associates of Park Chung-hee. For this reason, Park Geun-hye, former chairwoman of the GNP, has been considered an influential figure within the foundation.

If the Jeongsu foundation refuses to return the property, the government is reportedly reviewing a way to compensate Kim's family members and then seek indemnity for the foundation. The Truth and Reconciliation Commission has recommended the government to pay compensation on behalf of the foundation if it does not return the property from the Jeongsu Scholarship Foundation.

Please direct questions or comments to [englishhani@hani.co.kr]