'Consulting fraud targeting companies'... Court says full investment must be reimbursed

A company that invested 100 million won in a consulting company but did not receive the principal or profits filed a lawsuit for the investment and won.

The court ruled that it was illegal to induce investment by guaranteeing high returns.

According to the legal community on the 24th, the Seoul Central District Court ruled in favor of the plaintiff on January 17 in a lawsuit claiming return of investment money filed by electric construction company A against management consulting company B.

Previously, Company A received financial counseling from consulting firm B in March 2023.

Through this, Company B, which had become acquainted with Company A, urged them to invest, saying they would provide various management consulting services free of charge.

Afterwards, the two companies signed an investment contract in April of the same year, setting a repayment date and rate of return for the investment amount of 180 million won.

However, it is known that Company B changed its attitude after the investment was paid.

Initially, Company B paid profits for 6 months, but it was confirmed that neither the profits nor the principal was returned for more than a year.

It was revealed that Company A had requested several times to return the investment, but Company B had delayed the return, citing various reasons.

Accordingly, Company A filed a lawsuit seeking return of the investment money.

Company A argued that the entire principal should be returned, citing the fact that Company B did not fulfill its commitments in the investment contract and illegally collected a large amount of investment money using high interest rates.

The court said, “Company B induced investment even though it was not capable of keeping the original agreement,” and ruled that Company A should pay the full principal amount of the investment, considering that Company A suffered damages due to Company B’s illegal actions.

Attorney Yang Ki-yeon of Daeryun Law Firm, who acted as legal representative for Company A, emphasized, "An important issue in a lawsuit for the return of investment money is determining whether there was an illegal part in the investment process," and added, "Unlike loans, if the investment money is not specified in the contract, you may find yourself in a situation where you cannot be repaid even if you claim the principal and profits."

He continued, "In this case, the investment contract contained phrases such as 'investment contract', 'investment', 'investment operation period', and 'monthly dividend guaranteed rate of return'." He explained, "We were able to recover the entire investment amount from Company B by proving the guarantee of lump sum repayment of the principal and at the same time filing a criminal complaint."
 

Reporter Ko Young-min (youngman@ikbc.co.kr)

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'Consulting fraud targeting companies'... Court says, "Full investment amount must be reimbursed" (Shortcut)