Regular Column | Real Estate PF Disputes and the Limits of Criminal Liability
In a recent column, Attorney In-seok Seo examined the practical limitations of holding parties criminally liable in real estate Project Financing (PF) disputes.
A recent case involving the criminal complaint of employees—who allegedly embezzled commissions during a 14 billion KRW real estate PF loan process—highlighted the structural difficulties of PF-related criminal cases. Despite the allegations of professional breach of trust, the investigation has been significantly delayed due to challenges in proving the flow of funds and criminal intent.
While the PF method offers advantages such as project-based financing and risk distribution among multiple participants, it frequently leads to disputes due to the complex interests of developers, contractors, and financial institutions. However, the courts tend to view these disputes primarily as matters of civil damages.
In particular, for the crime of ‘Breach of Trust’ (Breach of Duty) under the Criminal Act to be established, the requirement of being “a person who administers another's business” must be met. In PF business relationships, it is difficult to prove a fiduciary relationship that transcends mere contractual obligations. According to current judicial precedents, it is rare for criminal liability to be recognized based solely on the outcome of business failure or the occurrence of financial loss.
Attorney In-seok Seo pointed out this reality and emphasized that as the PF market expands, institutional and legislative discussions are urgently needed. He stressed that malicious illegal acts exploiting complex financial structures should not be dismissed as simple civil defaults.
| View Original Article : www.tleaves.co.kr/news/articleView.html?idxno=8950
Regular Column | Real Estate PF Disputes and the Limits of Criminal Liability
In a recent column, Attorney In-seok Seo examined the practical limitations of holding parties criminally liable in real estate Project Financing (PF) disputes.
A recent case involving the criminal complaint of employees—who allegedly embezzled commissions during a 14 billion KRW real estate PF loan process—highlighted the structural difficulties of PF-related criminal cases. Despite the allegations of professional breach of trust, the investigation has been significantly delayed due to challenges in proving the flow of funds and criminal intent.
While the PF method offers advantages such as project-based financing and risk distribution among multiple participants, it frequently leads to disputes due to the complex interests of developers, contractors, and financial institutions. However, the courts tend to view these disputes primarily as matters of civil damages.
In particular, for the crime of ‘Breach of Trust’ (Breach of Duty) under the Criminal Act to be established, the requirement of being “a person who administers another's business” must be met. In PF business relationships, it is difficult to prove a fiduciary relationship that transcends mere contractual obligations. According to current judicial precedents, it is rare for criminal liability to be recognized based solely on the outcome of business failure or the occurrence of financial loss.
Attorney In-seok Seo pointed out this reality and emphasized that as the PF market expands, institutional and legislative discussions are urgently needed. He stressed that malicious illegal acts exploiting complex financial structures should not be dismissed as simple civil defaults.
| View Original Article : www.tleaves.co.kr/news/articleView.html?idxno=8950