The Korea Creative Content Agency (KOCCA) under the Ministry of Culture, Sports and Tourism has found that over 200 million won from a project aimed at fostering a Korean Wave webtoon platform was partially used by another company for importing Chinese webtoons. KOCCA has notified the company that it will reclaim the subsidies. However, the first-instance court ruled that 'the company cannot be said to have deceived KOCCA,' rendering the subsidy reclamation invalid.
According to the legal community on the 31st, the 11th Division of the Seoul Administrative Court (Directors General Kim Jun-young, Kim Min-a, and Kim Seong-ki) ruled in favor of the plaintiff in the lawsuit challenging the validity of the reclamation of national subsidies filed by Company A, which operates a webtoon platform.
KOCCA selected Company A as the operator for the 'Support Project for the Establishment and Operation of Overseas Platforms for Comics' in 2022 and decided to provide a maximum of 390 million won in support. This project aims to discover and nurture platform corporations that will lead the overseas expansion of Korean comics and seize the global comic market.
Company A wrote in the business plan submitted to KOCCA that it would secure 30 'popular Korean works' that are popular in Korea and can appeal overseas. It also noted that it would translate these into English, Spanish, and Indonesian to serialize them on its platform. Company A spent a total of 257.1 million won, including 180 million won to acquire 23 webtoon copyrights and 27.5 million won for platform promotion.
However, after conducting an on-site inspection and a review committee in January 2023, KOCCA notified Company A to return the national subsidies granted. This was due to the reason that most of the webtoons purchased with national funds were works created by Chinese authors. It was argued that this contradicted the project's original goals set by KOCCA as well as the content of Company A's business plan.
Company A filed a lawsuit against KOCCA regarding the invalidity of the reclamation of national subsidies and won. The court stated that there was no evidence to suggest that Company A deceived KOCCA. The court noted, 'The business plan states that Company A's target for purchase is 'popular Korean works,' and it does not appear that this restricts the target to those produced in Korea or created by Korean authors.'
The court also found that KOCCA did not have the authority to decide the return of national subsidies from Company A. It stated, 'According to Article 30 of the Subsidies Act, the authority to cancel the grant decision is given to the heads of central agencies,' adding that 'KOCCA is merely a corporation established under Article 31 of the Basic Law for the Promotion of Cultural Industries, and therefore it lacks (subsidy-related) disposition authority.'