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Kim Jong-ik

The Supreme Court ruled on Apr. 2 to order the state and individuals involved in the illegal surveillance of former KB Hanmaum CEO Kim Jong-ik to pay him over US$400,000 in damages.

Kim, 62, was a high-profile victim of illegal surveillance of civilians by the Office of the Prime Minister (OPM) during the presidency of Lee Myung-bak (2008-13).

The court‘s second division under Justice Cho Hee-dae ruled on Apr. 4 to uphold an original court verdict partially siding with Kim and five family members in their suit claiming damages from the state and seven individuals, including former OPM public ethics support officer Lee In-kyu. In the ruling, the court ordered the defendants to pay damages of 520.92 million won (US$450,900) to Kim and his family.

“Forcing Mr. Kim to resign his post as CEO and transfer his shares to others because he had posted writings and videos on his blog maligning the President and administration policies was an illegal exercise of public authority,” the Supreme Court concluded.

“The state is liable for compensation of damages resulting from the illegal performance of duties by affiliated government employees,” it ruled.

Kim was one of the most prominent victims of illegal surveillance by the office of the OPM’s public ethics support officer during the Lee administration in 2008. Kim was targeted for having posted a video caricaturing Lee on his blog. The public ethics support officer’s office conducted an internal probe into the circumstances behind Kim’s posting of the video and the possibility of his having embezzled company funds.

In the process, former office secretary Won Chung-yeon also visited the KB labor team leader and threatened that the bank‘s CEO would “not be free” if Kim were left in place. Kim subsequently shut down his blog, but the OPM continued making threats until he finally resigned as CEO and forfeited his company shares. Kim ended up selling 75% of his stake in KB Hanmaum at a heavy discount.

In response to the actions, Kim filed suit against the state claiming 1.285 billion won (US$1.1 million) in damages for being “forced to resign as CEO and sell shares to others at a discount due to illegal monitoring” and for “concealment of documents and damaging of hard disks in relation to [the surveillance] that hindered the investigation and made it impossible to bring certain facts to light.”

In the first trial, the court recognized liability for 385.92 million won (US$334,000) in back pay and 40 million won (US$34,600) in “consolation money,” noting that Kim had been allowed to work for three years longer than the typical term for a CEO. In the second trial, the court set the consolation money at 100 million won (US$86,600) - 60 million won higher than first court. Explaining its decision, it cited the “need to deter and prevent similar instance of these illegal actions, which were a grievous violation that threatens to damage a cornerstone of democracy.” The court also recognized damages of 35 million won (US$30,300) to Kim’s family members.

But the earlier courts also said they could not recognize Kim as having suffered a loss from his KB Hanmaum stock sales because he could not be viewed as the company’s actual owner.

“The civil courts did not recognize Mr. Kim’s status as majority shareholder and CEO as the criminal courts did. That part is incomprehensible,” said attorney Choi Gang-uk, who represented Kim.

Lee In-kyu was previously sentenced to ten months in prison in 2013 on charges of abuse of authority and coercion for conducting illegal surveillance on Kim and forcing him to give up his KB Hanmaum shares.

By Seo Young-ji, staff reporter

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