South Korea

Korea Herald | English | News | Nov. 20, 2025 | Geopolitical Conflict and Disputes

The decision by South Korea's prosecution to drop its appeal in the high-profile Daejang-dong corruption case has escalated into a significant political and judicial crisis. The opposition conservative People Power Party accuses the Justice Ministry of interfering with judicial independence and protecting President Lee Jae Myung, who has been politically shadowed by the case for years. Party leaders held rallies demanding the resignation of Justice Minister Jung Sung-ho and Vice Minister Lee Jin-su, accusing them of pressuring prosecutors and trivializing wrongdoing that caused substantial taxpayer losses.

Internal dissent within the prosecution followed the appeal withdrawal. The head of the Seoul Central District Prosecutors’ Office, Jung Jin-woo, and several other senior prosecutors resigned, protesting the acting Prosecutor General Noh Man-seok’s handling of the decision. Noh admitted consulting Justice Minister Jung before finalizing the appeal drop and resigned days later. Additional resignations among prosecutors are anticipated, while the Justice Ministry reportedly plans to reassign protesting prosecutors to lower-ranking positions, a move seen as punitive and unprecedented within the prosecution service.

The scandal dates back to a 2015 redevelopment project in Daejang-dong, Seongnam, where a disproportionate share of profits was awarded to politically connected private firms, despite minimal financial contribution. Prosecutors claimed the municipal developer was entitled to significantly higher profits. Several individuals received prison sentences for breach of trust. However, the court ruled against recognizing the charges as aggravated economic crimes, and by dropping the appeal, prosecutors lost the chance to challenge this, limiting the potential legal consequences. This ruling narrows liability for defendants, including President Lee, particularly affecting related cases after his term.

韓 산업계로 손뻗는 해커 조직…심텍·SFA 이어 LG엔솔도 피해

Digital Daily | Local Language | News | Nov. 20, 2025 | Cyber Attacks and Data Loss

LG Energy Solution's U.S. plant in Holland, Michigan, was targeted by the ransomware group Akira, which claims to have stolen 1.67 terabytes of confidential corporate documents. The stolen data reportedly includes employees' personal information such as passports, medical records, IDs, contact details, as well as confidential project documents, contracts, and information related to customers and partner companies. LG Energy Solution confirmed the attack affected only the U.S. plant, not its headquarters or other facilities, and emphasized that the plant is now operating normally while additional security measures and investigations are ongoing.

This incident is part of a broader trend of ransomware attacks targeting the Korean battery manufacturing and semiconductor industries. In late 2024, the ransomware group Underground attacked PCB substrate manufacturer Simtek and later targeted SFA, publishing large volumes of internal data on the dark web. Haesung DS experienced a similar breach where hackers exploited SSL-VPN vulnerabilities to deploy ransomware and leak data. These attacks have prompted affected companies to report to the Korea Internet & Security Agency (KISA) and strengthen their cybersecurity defenses.

Industry sources express concern that ongoing ransomware threats could severely disrupt business operations due to the B2B nature of these manufacturers, where leaked information about customers and tailored solutions could cause extensive damage and erode trust. While no financial losses have been reported from ransomware payment compliance, KISA advises against paying ransoms to prevent encouraging further attacks. Industry players are collaborating on enhanced security measures to mitigate risks.

비상장 스타트업, 스톡옵션 과세 논란…“인재 보상제도 취지 퇴색”

ET News | Local Language | News | Nov. 20, 2025 | UndeterminedTaxes

The National Tax Service (NTS) has caused controversy by taxing stock options of employees at unlisted startups based on a "post-transaction amount" instead of the "time of exercise" method used for listed companies. This approach has led to cases where additional taxes and penalties amounting to tens of billions of won were imposed years after the exercise, based on market prices from unrelated third-party trades. CEOs affected have had to spend significant resources on legal defenses, with penalty taxes reportedly reaching 60%.

This tax issue arises because unlisted companies lack publicly available market prices at the time stock options are exercised. Unlike listed companies, where the closing price on the exercise day sets a clear market value, unlisted company valuations are affected by factors like venture capital terms, preferred shares, company performance, and financing rounds, causing significant price fluctuations within short periods. The current taxation system risks turning stock options into punitive tax burdens, undermining their role as talent compensation tools.

The National Tax Service defended its position, stating that market prices for unlisted stocks can be checked via unlisted stock exchanges and through mandatory reporting of private trades. The NTS also highlighted a tax deferral system that delays tax liabilities until stock sale. However, industry representatives argue that many unlisted companies are not listed on these exchanges, making accurate valuation difficult, and the tax deferral system has strict limitations that restrict its practical use.

Experts and industry leaders are calling for urgent reforms to ensure stock options fulfill their intended role as performance incentives. They emphasize the need for objective valuation methods by the tax authorities to prevent punitive taxation based on isolated high-priced transactions, which they say severely damages the startup talent compensation ecosystem.