[Edaily Marketin JI YEONG-EUI Reporter] It has been confirmed that prosecutors have decided to suspend prosecution in the case involving Ko Young-chul, Chairman of the National Credit Union Federation, regarding allegations of violating the Entrusted Election Act. The risk of his election being invalidated—which had escalated due to a police investigation and a complaint filed by a labor union—appears to be resolved for now, with the matter not proceeding to trial.

However, since a decision to defer prosecution—unlike a “no charges” ruling—does not completely negate the criminal allegations themselves, the controversy over the legitimacy of Chairman Ko’s election and the appropriateness of his exercise of personnel authority since taking office are expected to remain as separate corporate governance issues.

According to a synthesis of reports from the investment banking (IB) industry and E-Daily on the 7th, the prosecution recently granted a deferred prosecution decision regarding Chairman Ko’s alleged violation of the Proxy Election Act. Consequently, Mr. Choi, the Shinhyup Planning Director who faced the same charges, also received a deferred prosecution decision. A deferred prosecution is a decision by the prosecution not to refer a case to trial, even though the facts of the alleged offense are acknowledged, by taking into consideration factors such as the motive, means, and consequences of the crime, as well as the circumstances following the offense. Consequently, Chairman Ko has avoided meeting the criteria for the annulment of his election under the Proxy Election Act, which requires a “sentence of imprisonment or a fine of 1 million won or more.”

Since he received a deferred prosecution, the possibility of Chairman Ko losing his position following a court battle will not materialize immediately. Under the Act on Entrusted Elections for Public Organizations, etc., an elected official’s victory is invalidated if they are sentenced to imprisonment or a fine of 1 million won or more for a violation of the law related to that entrusted election. However, since the prosecution decided not to refer the case to trial, the risk of election invalidation—which was contingent on a sentence of a fine or more—has, for the time being, been put on hold.

The focus is now expected to shift to appeals by the complainants—including the labor union—and internal accountability issues. The complainants can challenge the appropriateness of the prosecution’s decision through procedures such as filing an appeal. However, given that the statute of limitations for this case expired on the 6th, the appeal could be dismissed.

Nevertheless, since the prosecution’s decision was a “deferred prosecution” rather than a “no charges” ruling, the issue remains unresolved. It is difficult to conclude that the controversy over the propriety of the election process has been completely resolved. This is because, while a deferred prosecution avoids a trial, it does not constitute a decision by the investigative authorities that completely denies the potential for illegality. Consequently, internal debates over responsibility regarding the legitimacy of the election are expected to continue.

It is reported that within the Central Association, the chairpersons of member credit unions have been closely monitoring the progress of the investigation. These chairpersons are voters in the Central Association chairperson election and form a key pillar of the Central Association’s decision-making structure. Given that a decision of “deferred prosecution” was issued rather than “no grounds for suspicion,” there is speculation that concerns regarding the election process may continue to be raised, particularly by internal decision-making bodies and the chairpersons of member credit unions.

It is understood that the National Credit Union Federation’s labor union plans to file an appeal challenging whether the decision to grant a deferred prosecution—despite the charges being substantiated—was appropriate.

Meanwhile, Chairman Ko’s side has strongly opposed the union’s allegations throughout this process. In a statement previously distributed to the association’s executives and employees, Chairman Ko stated, “We intend to respond resolutely to the labor union’s illegal acts, including the dissemination of false information, defamation, and obstruction of business.”