Sookmyung disguises donated funds as money from foundation


Conflict is deepening at two universities between their foundation boards and faculties.

Sookmyung Women’s University based in Seoul is mired in internal conflict over school funds.

Inha University, a prominent school in Incheon, is in dispute over its newly elected president.

Some Inha faculty members and Incheon-based civic groups say that a graduate of the same high school as board chairman Cho Yang-ho was elected as the new president on Thursday. Cho is also the chairman of Hanjin Group, a conglomerate involved in shipping and the airline industry.

They claim one of Cho’s high school alumni was selected as the new president because the board wants to place the school management under its control.

“The President Selection Committee was comprised of 11 members, five of whom are Cho’s high school alumni,” said three local civic groups in a statement on Wednesday.

“It is disappointing that Inha University, a flagship school in Incheon, decided on its president through cronyism.”

But the school claims that the new president was selected according to the legal procedures of the school.

“The civic groups criticize the school because the new president doesn’t have a strong bond with the local community. Now that he is elected he will have chance to interact with them,” said a school official, who asked for anonymity.

The conflict at Sookmyung, one of the nation’s most prestigious women’s universities, stems from the clash between President Han Young-sil and the foundation board over the latter’s alleged “laundering” of donated money.

The school received a total of 68.5 billion won ($61 million) in donations from 1995 to 2009. It placed them in the foundation account, then transferred it to a school administration account, as if making a financial contribution to the school management.

However, excluding those donations, the foundation has made no contribution of its own to school administration.

Under the school’s internal law, school foundations are supposed to make financial contributions to the operational budget of schools.

Contribution by school foundations is one of the four sources of the school management budget. The other three are tuition fees from students, government subsidies and donations.

Last week, Sookmyung alumni, Han and a group of professors issued a statement calling for resignation of foundation chairman Lee Yong-tae, who has been in his position for 14 years.

“Chairman Lee has never made financial contributions to the management budget, only aggravating the school financial status,” said the alumni association in the statement.

Shim Jae-woon, a Sookmyung spokesperson, said the school has demanded the board make contributions as required by the law, and fulfill its legal role, but it has ignored the demand.

“If the foundation had contributed the required amount of about 4 billion won ($3.5 million won), we could have slashed tuition fees by 4 to 5 percent,” Shim said.

But the board dismissed allegations that they had misappropriated or “laundered” the donated money in the process of transferring it to the school management.

“We never abused donations, though we can’t afford to contribute to school management because of a lack of funds,” a board member said.

Founded in 1906 as the nation’s first royal private school for women, Sookmyung is not sponsored by corporations, unlike other private universities. So, it depends largely on tuition fees and donations.

The board countered the attacks, calling into question President Han’s intentions. The board suspects Han may be trying to kick out the chairman and other board members in a bid to renew her presidential term, which is to end this August.

Sources said the dispute represents a power struggle between Han and her predecessor Lee Kyung-sook, who had served as the school president for 14 years from 1994 to 2008.

Lee is now chairperson of the state-run Student Aid Foundation. Six of the eight members on the board, including the chairman, were appointed by Lee Kyung-sook.

She worked in the transition committee of President-elect Lee Myung-bak in late 2007.

Currently, Han sits on the emergency panel of the ruling Saenuri Party led by Rep. Park Geun-hye.

By Lee Woo-young  (wylee@heraldcorp.com)