The Seoul Central District Court found former KeSPA chairman and politician Jun Byung Hun guilty of receiving over 500,000,000 KRW in corporate bribes, according to Chosun.com. Mr. Jun—a member of parliament and former official in the current Presidential administration—had been accused of receiving bribes from Lotte Homeshopping, GS Homeshopping, and KT in exchange for political favors between 2013 and 2015. He is accused of funneling these bribes through KeSPA as sponsorships or donations, which he then embezzled.
The court sentenced him to five years in prison and fined him 350,000,000 KRW on the bribery charges. The court also found Mr. Jun guilty of abusing his influence as a government official to appropriate 2,000,000,000 KRW in government funding toward KeSPA.
Mr. Jun declared that he would "immediately" appeal the court's decision.
Korean prosecutors formally indicted former KeSPA chairman Jun on the 18th, according to Hankyoreh. He is charged with bribery, embezzlement, abuse of power as a government official, receiving illegal political funds and other charges.
The primary charges, according to Hankyoreh, are as follows:
1) Receiving 550,000,000 Korean won in bribes from LG Homeshopping, GS homeshopping, and KT, funneled through KeSPA.
2) Directly receiving bribes/kickbacks from Lotte homeshopping in the form of gift cards, etc., worth 11,000,000 Won.
3) Using his position on the President's staff to prevent a budget slash for KeSPA, maintaining 2,000,000,000 Won of funding.
4) Receiving 20,000,000 Won in campaign funds from an esports broadcasting company.
Prosecutors also indicted the former chairman of Lotte Homeshopping for actively seeking favors from Mr. Jun in return for payment. Prosecutors said no charges were brought on GS Homeshopping or KT due to the nature of Mr. Jun's coercion, and the two company's reluctant attitude to giving into his requests.
Korean prosecutors summoned former KeSPA chairman Jun for questioning on the 20th, on charges of receiving bribes (described below) from Lotte Homeshopping, according to Yonhap News. While Mr. Jun said "I'm deeply remorseful for the deviations of two of my former aides..." he denied any wrongdoing himself, stating "I have not participated in anything illegal." The questioning session is reported to have lasted for 17 hours.
Hankyoreh reported that prosecutors plan to issue a warrant for Mr. Jun's arrest. The Korean newspaper noted that Mr. Jun had been investigated for receiving outside funds in the past, but had avoided direct implication.
On November 16th, Mr. Jun said he intended to resign from his position on Korean President Moon Jae-In's staff. The bribery scandal has been a largely political story in the South Korean press.
Gametoc reports that two high ranking KeSPA officials "Mr. Cho" and "Mr. Park" have been apprehended by KesPA on charges including embezzlement, money laundering, and paying out false salaries.
Investigators said Mr. Cho issued a KeSPA credit card to Mr. Yun—the aide to Mr. Jun who is charged with receiving and embezzling bribes from Lotte Homeshopping—which he used for large amounts of personal spending.
Hankook Ilbo had previously reported that Mr. Jun changed KeSPA bylaws in order to give himself a salary as chairman, and later honorary chairman (the position was previously nonsalaried).
Hankyoreh reported earlier that investigators have testimony implicating Mr. Jun directly, and that they plan to summon him upon his return to Korea on the 15th from an overseas trip.
Maeil Business reports that Korean prosecutors have testimony from former Lotte Homeshopping CEO Kang Hyun-Gu that states he met with ex-KeSPA Chairman Mr. Jun before giving a 300,000,000 won sponsorship to KeSPA. The testimony was obtained in a prior investigation into Lotte Homeshopping, where Mr. Kang was found guilty of orchestrating a broad-ranging campaign of bribery to ensure Lotte Homeshopping's continued operations.
Joongang Ilbo reports that Mr. Yun, an aide to former KeSPA chairman Jun, requested that Lotte Homeshopping form a progaming team shortly after it received reapproval to continue operating. According to a source related to Lotte "Mr. Yun suggested that we create a progaming team, but the expenditure of around 1,000,000,000 won was too expensive. After weighing it internally, we offered to participate as a title sponsor for a KeSPA held gaming tournament, putting up around 300,000,000 won."
Lotte denies any illicit favors were received in return for their sponsorship, which the Prosecutor's Office is currently investigating. They believe 100,000,000 of the sponsorship money was embezzled by Mr. Yun alongside Mr. Kim (another one of the ex-Charmain's aides), and laundered with the help of a broker Mr. Bae. All three parties have been arrested.
While ex-chariman Jun has yet to be implicated directly, Yonhap news noted that Mr. Jun was responsible for pushing through legislation that allowed the government to stop the operations of home shopping companies for certain unfair business practices.
Korean prosecutors have raided KeSPA offices as part of an investigation into bribes received by aides of a former KeSPA chairman, as well as the embezzlement of KeSPA funds.
"We're looking into the process through which the Korea e-Sports Association received sponsorship funds from Lotte Homeshopping, and the embezzlement of Association funds" said an official related to the Prosecutor's Office, according to Korean newspaper Hankyoreh.
According to Hankyoreh, the investigation began after prosecutors discovered clues that aides of a former KeSPA Chairman had received payments worth several hundred thousands of dollars from Lotte Homeshopping. Prosecutors are also investigating a 300,000,000 won sponsorship deal between Lotte Homeshopping and KeSPA for any favors received in return by Lotte Homeshopping (The 2015 KeSPA Cup Season 2 was sponsored by Lotte Homeshopping).
The former KeSPA chairman—who remains unnamed in media reports but is almost certainly Mr. Jun Byung-Hun by his description as a former MP and current member of the Korean president's staff—previously held a position on a government committee with the power to renew Lotte Homeshopping's operating license. Prosecutors suspect Lotte Homeshopping may have "lobbied" the former chairman for renewal.
The Seoul Economic Daily noted that prosecutors had previously investigated Lotte Homeshopping in 2016 for submitting falsified business plans and creating secret funds to lobby for reapproval, which resulted in the indictment of its CEO.
According to JTBC News, three arrests have been made so far in the investigation, including aides to the former KeSPA chairman.