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Fri Nov 10 2017
Ex-Chairman Jeon in court On Bribery Charges Following Raid On KeSPA Office

Korean e-Sports Association, otherwise known as KeSPA, was raided by the police on a warrant on the basis for bribery. The Ex-Chairman Byeong-Heon Jeon was subject to bribery charges in which he allegedly accepted 300 million KRW (~ $270,000 USD) from a home-shopping branch of Korean mega-corporation, Lotte Group. Court sessions related to this specific case is ongoing.

Ex-Chairman Jeon was the chairman of KeSPA since 2013. During his time as chairman, KeSPA grew into a dominant force in the Korean esports sector through titles including League of Legends and Starcraft II. His involvement with the growth in Korean esports was seen in a positive light by the community as he was active in the vibrant cultures of esports, including cosplay (as seen below cosplaying as Gragas from League of Legends, and in the cover image as Arcturus Mengsk from Starcraft II).

Chairman Jeon was appointed by President Moon Jae-In to become the Senior Secretary to the President for Political Affairs of the Korean government in May, this year, effectively making Jeon an ex-chairman.

How did this individual become a subject of prosection and federal court? How does this involve KeSPA cup? Will we see KeSPA this year? We will try to answer all these answers by first addressing Director Yeo's appeals against mobile games that allegedly promoted gambling.

Part 1: Director Yeo Appeals to the Parliament

Last month October 19th, Myung-Sook Yeo, the Director of Game Rating and Administration Committee, appealed against charges of corruption within the gaming sector. The public allegations stated concerns surrounding corruption within the game development industry.

Director Yeo's appeal started against games on mobile platforms that promoted gambling for children. According to Director Yeo, agendas regarding legal measures for games have been delayed and in some cases discarded due to four gaming corporations (which were suggested to be but not limited to Nexon, Netmarble, and NCSoft) that made it impossible to voice the issue.

In other words, the four corporations which were involved in the alleged corruption are in effect monopolizing from distribution to the legalities behind their products, which would additionally suggest government corruption.

The public hearing and allegation would be dubbed as the "Bomb Appeal" (폭탄발언). Otherwise, the allegation was called the "Four Corporation Monopoly" (게임판 4대 농단세력).

Many politicians were extremely skeptical in the beginning, criticizing Director Yeo for the lack of evidence supporting her claim. However, due to the severe criticism, she publicly released the name of the person in whom she called the "root of the corruption" in the Korean esports industry, the previous Chairman of KeSPA, Byeong-Heon Jeon.

Director Yeo revealed that there existed a list of people who were appointed to either government, public positions, or media with the assistance of Chairman Jeon for the purpose of manipulating or avoiding laws within the gaming industry. The people on the list were claimed to be either family members or friends of Chairman Jeon.

Furthermore, Chairman Jeon was revealed to have accepted 300 million Korean Won (around 270,000 USD) from the Lotte Home-Shopping Branch, a subsidiary of Lotte Group, in 2015 for the KeSPA Cup.

Part 2: Allegation Turned into a Raid

Director Yeo eventually gained support from the parliament to trigger investigations revolving corruption in the gaming industry. Director Yeo suggested that among the corrupted officials and businessmen, the root of the issue was Chairman Jeon.

Chairman Jeon would speak against such allegations. However, a warrant was passed after Director Yeo provided email and text evidence that provided some doubt against Chairman Jeon's lawfulness.

KeSPA tweeted that the allegations of Lotte Home-Shopping's fund transferring to KeSPA were false.

However, after an initial investigation on KeSPA's bank transfers, it was later confirmed that the Korean e-Sports Association did indeed accept a bank transfer from the Lotte Home-Shopping Branch. Ex-Chairman Jeon stated that he was not connected to such scandal, but the prosecutors released that Chairman Jeon did indeed accept the funds from Lotte through KeSPA.

The prosecutors released a statement that conveyed Ex-Chairman Jeon's history with Lotte where he had pressured the Lotte Home-Shopping Branch with their sales in 2014. Ex-Chairman initially demanded 1 billion Korean Won (around 900,000 USD) from the Lotte Home-Shopping Branch, but they settled to decrease the bribe to 300 million Korean Won ( ~ 270,000 USD).

The prosecutors of the Korean federal court were granted a warrant to investigate KeSPA's office further. The prosecutors arrested three individuals on accounts of embezzlement and confiscated documents from the office for further investigation.

Part 3: The Aftermath

What started as a public cry for justice to protect Korean youth from mobile games that promoted similar principles found in gambling, turned into a catalyst of KeSPA's office-raid. Currently, the federal court is in session, featuring ex-Chairman Jeon, his affiliates, and KeSPA.

Once the attention surrounding the lack of systems that protected youth from games that allegedly promoted gambling ideas surfaced, the whole gaming industry became a significant subject of controversy, thereby demanding a large-scale sweep of investigations.

This appeal by Director Yeo was supported by many politicians and citizens, inspiring a government involvement to inspect the gaming industries within Korea.

Director Yeo is continuing her crusade against corruption within the Korean gaming industry. She has been supported by several branches of government to continue the fight against games that allow minors to proceed with microtransactions without sufficient legal regulations and to protect those who are struggling with this addiction. (Microtransaction addiction is just as dangerous as gambling addiction. IGN's article on the issue.)

Hansan's Reflection

Alright, this article had a lot to cover. There are a lot of gaming issues that are related to this single incident. But let's start with a quick recap (that will include extra information that I chose not to cover for the sake of this narrative)!

Recap in Chronological Order:

Ex-Chairman Jeon pressured Lotte Group's home-shopping branch. Lotte paid Jeon around $270,000. Jeon had friends and family members around the gaming industry that he helped in order to place them into important positions- positions from government jobs to media companies. His affiliates helped disrupt and avoid any legal barriers that Jeon and his business acquaintances were not pleased with. Director Yeo asked Jeon and other gaming industry figures to cooperate in developing laws based on moral reasons (including restrictions to combat microtransaction addiction). Jeon and company did not cooperate, in fact, they did not respond in any way (ignoring the lady director). Jeon was invited by the president to be part of the cabinet. Director Yeo appealed to the parliament. Parliament was first critical of her. However, after the big bust on KeSPA, people started acting cooperatively, igniting controversies surrounding the gaming industry. Prosecutors investigated on Ex-Chairman Jeon and confirmed that he was bribed. Three employees at KeSPA were arrested for embezzlement. A federal court is in session featuring Jeon for corruption. Director Yeo is crusading against Korean game industry giants, including Nexon and Netmarble, who are also suspected of corruption.

Phew! That was a lot to take in, right? Now, I would like to discuss some of the implications that we can take away from this whole scandal in the quickest manner.

  1. KeSPA is INACTIVE right now. This scandal is probably the reason why we are not seeing KeSPA's public announcement on their annual events/tournaments.
  2. Lotte Group has been part of many scandals since its inauguration. This is nothing new nor is it surprising.
  3. Director Yeo seems to be fighting ferociously against the gaming industry's giants (who are in effect part of an oligarchy). We have yet to see if we see some level of corruption in Korea would decrease in the gaming sector.
The biggest takeaway from this scandal, in my opinion, is the sad fact that KeSPA cup will either be delayed or canceled due to this enormous scandal. Most LCK players' contracts end in several days, meaning there will be significant changes to rosters. We might not be able to spectate this year's super KT Rolster's team and SKT's roster after their loss to Samsung Galaxy at Worlds in China.

What is Next For The KeSPA Cup?

KeSPA did not disclose any information about a KeSPA Cup and replied back to media press companies that they have to wait until they finalize their decision about the event following the events of Ex-Chairman Jeon. However, we have found rumors and leaks about KeSPA's initial plans on holding the KeSPA Cup this coming December with PLAYERUNKNOWN'S BATTLEGROUNDS as the co-title during the event. Additionally, OGN was labeled to be the primary broadcasting company of the event. We have yet to see KeSPA's final public announcement around KeSPA Cup.

KeSPA's interests were to develop a healthy esports ecosystem in Korea. However, with Korea's consistent issue around bribery and corruption, KeSPA's reputation is stained. There are still questions surrounding what will happen to KeSPA moving forward.

Although this scandal was outrageous on many levels, I believe that KeSPA will remain the same and people will slowly forget this incident as a thing of the past. Maybe, we may see a change in the organization after the event.

What do you guys think? Please, let us know what you think in the comment section below.

Image Credit: OGN, YTN, KeSPA Homepage, MBN

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