Prosecutors and the National Tax Service are seizing the assets of Yoo Byung-eon, the de facto owner of ferry operator Chonghaejin Marine, because of the estimated astronomical cost of compensating the victims and financing the search for missing passengers.
More than W600 billion is expected to be spent to compensate the family of the victims and to cover other expenses related to the tragedy that left 302 people dead or missing (US$1=W1,027). But a substantial portion of the cost will have to come from the taxpayer.
Each victim is entitled to up to W350 million in insurance payments from the Korea Shipping Association. Passengers can claim another W100 million each from individual travel insurance. But the passengers may not be able to claim the full insurance payments should the crew of the Sewol ferry be found guilty of serious offences.
The crew and owner of the ferry are responsible for compensating the victims, but it is difficult to determine how much money the Yoo family has. Yoo is an undischarged bankrupt with no assets to his own name but has pledged what he claims is his entire actual estate of just W10 billion.
Chonghaejin Marine is teetering on the brink of bankruptcy. The cost of property damage from lost cargo aboard the Sewol is estimated at around W200 billion, while the rescue and search operations are expected to add another W200 billion to the bill.
The government intends to use taxpayers' money to cover expenses first and then sue Chonghaejin Marine and the Yoo family to recover as much as possible.
After the Sampoong Department Store collapse back in 1995, the government and Seoul city government decided to pay W375.8 billion to the 1,440 victims of the disaster, including 502 people who were killed. Sampoong Department Store sold off its assets and raised W148.4 billion, while the government and Seoul city government covered the rest.
At present, the Yoo family's assets are estimated at around W200 billion, including W130 billion prosecutors believe were funneled overseas. But it depends on prosecutors and the NTS just how much of the money they can seize.
A prosecution spokesman said, "We have no choice but to seize as much of the Yoo family's assets as possible to uphold justice and minimize the burden on taxpayers."