Myongji Educational Foundation still in deep water over debt

Social Affairs

Published: 14 Feb. 2022, 14:34 Updated: 14 Feb. 2022, 18:31

Myongji Educational Foundation still in deep water over debt

Myongji University in Seodaemun District, western Seoul [MYONGJI UNIVERSITY]

Myongji Educational Foundation, one of the largest private education foundations in Korea with around 30,000 students attending its affiliated schools, teeters on the brink of bankruptcy with around 200 billion won ($166.7 million) of debt as the court suspended the ongoing rehabilitation proceedings.

The foundation, which operates Myongji University, Myongji College and Myongji elementary, middle and high schools, stated that it will file for court receivership. Education authorities also stepped up with measures to minimize any further damage to students.

The financial crisis of Myongji Educational Foundation dates back to a real estate project in 2004 gone awry.

The Foundation constructed a silver town apartment complex on its university campus in Yongin, Gyeonggi, which it planned to rent out, while advertising that it will also build a golf course on the same land.

After three years, however, the golf course had still never been built, and the necessary legal procedures to build a golf course, such as obtaining a construction permit from the city, were never carried out, even when the land was being rented out. The foundation eventually asked for a permit in 2007, but Yongin City rejected the request. In 2013, the court ordered the foundation to return the investments it received from renters, 19.2 billion won, which the foundation failed to deliver.

The foundation filed for court receivership on Dec. 13, 2021, which the court deemed unfeasible and last Wednesday decided to discontinue the rehabilitation process. The decision to discontinue the rehabilitation proceeding will be finalized if an appeal is not filed within 14 days from the date of announcement.

Myongji Educational Foundation said it will file again for court receivership.

“If bankruptcy inevitably proceeds, we will take action by consulting with related agencies such as the court and the Ministry of Education,” the foundation said. “The attitude of the Education Ministry needs to be changed more proactively toward the rehabilitating educational foundation.”

The education authorities are also preparing countermeasures in the case of bankruptcy.

“Measures are being taken to prevent damage to students at Myongji Kindergarten and Myeongji elementary, middle and high school,” the Seoul Metropolitan Office of Education said. “In the worst case scenario, bankruptcy, we will request that the court at least allow this year’s newly enrolled students to [attend the next few years and] graduate from school."

The Ministry of Education is also expected to consider similar solutions to operate Myongji University and Myongji College for a few more years in the case that bankruptcy proceedings begin.

According to the ministry, if an educational foundation is dissolved due to bankruptcy, all of its affiliated schools will be shut down. Enrolled students at colleges and universities will be specially transferred to nearby schools, while elementary, middle and high schoolers will be reassigned to different schools by the educational office.

BY SEO JI-EUN [seo.jieun1@joongang.co.kr]