[NEWS] Promissory note was written but the money? 10 misunderstandings revealed

Cheonji Construction: “We lent Kim Junsu 5 billion won to be paid back by September 30th, but it wasn’t”

Toscana: “That’s all false. We’ve never borrowed money from the construction companies. We’ve paid for all the construction costs already.”

JYJ Kim Junsu is entangled in a 5 billion won lawsuit. Construction company CJ Construction is requesting repayment from Toscana Hotel, and applied for a 1.8 billion won provisional seizure of property at the Jeju District Court.

However, Toscana’s stance is completely different. They state that there is no repayment to be paid to Cheonji Construction, and revealed the confirmation document which has the company’s CEO’s seal as evidence. They also emphasized that Cheonji Construction embezzled billions of won in construction cost, causing damages to Toscana.

Dispatch looked at Toscana’s real estate registration and asked questions to Toscana executive Park Sungmin and CJES Entertainment representatives. We’ve compiled their answers and truths, and asked about tax and seizures based on the registration.

We’ve released Q&D (Question & Dispatch) to answer some questions of Kim Junsu’s lawsuit. We currently cannot reach Cheonji Consolidated Construction. They applied for a provisional seizure of property but are keeping their mouths closed. Through this, there is an unjust side to the lawsuit against Kim Junsu. 

Q1. We understand that there are two companies in question right now, Cheonji Consolidated Construction and CJ Construction.

D. Cheonji Consolidation Construction (hereby Cheonji) and CJ Construction (hereby CJ) are in reality, the same company. CJ is a paper company used for bidding. Therefore, Toscana was dealing with only one company.

If you verify CJ’s real estate registration, their address is 24, 6-gil, Gunam-ro, Jeju City. If you search this address online, Cheonji comes up. Their phone numbers are different but if you contact them, it goes to the same company.

Q2. To open Toscana, approximately 28.5 billion won was invested. 

D. Toscana executive Park Sungmin stated that the construction cost of the hotel was 28.5 billion won. Of that was a personal investment from Kim Junsu in the amount of 13.5 billion won. The remaining 15 billion won was obtained through a loan. Previously, a loan of 9 billion won was obtained from a foreign exchange bank for the purchase of land.

15 billion won was a loan from Nonghyup. Park Sungmin said, “9 billion of the 15 billion was used to repay the loan from the foreign exchange bank. The remaining 6 billion went to Cheonji.”

Q3. Why did money Toscana borrow go to Cheonji? 

D. Because the loan was obtained in the name of funds for equipment and items for the hotel. Legally, the bank deposits the money to the construction company directly. Therefore, 9 billion of the 15 billion was used to repay the loan from the foreign exchange bank. The remaining 6 billion went to Cheonji.

In reality, the 6 billion won that went to Cheonji is money Kim Junsu borrowed, and is an amount that Kim Junsu has to repay the bank. Cheonji also knows this so they returned the money to Kim Junsu. They used approximaely 8 billion won for hotel equipment and returned the remaining 50 billion. The promissory note was written in this process.

Q4. You said this is originally Kim Junsu’s money, then why did you write a promissory note? 

D. Park Sungmin said that this was a favour Cheonji requested, and Kim Junsu listened to their request. Park said, “Cheonji said they need the document for their accounting ledgers, so we wrote a promissory note for formality.”

In return, Toscana received a confirmation document that states there is ‘no repayment value’ associated with the promissory note. Park said, “This is originally Kim Junsu’s money. We wrote the promissory note with no repayment value for Cheonji to use in their accounting ledgers” and “knowing that it could be used later for malicious problems, we took appropriate measures (ie: the confirmation document).

Q5. So to summarize, you wrote the promissory not but did not borrow any money? 

D. Legally speaking, overlooking that it was mutually agreed upon, a promissory note for false representation of funds  is invalid. Kim Junsu never borrowed money from Cheonji. Cheonji was simply returning the money that Kim Junsu borrowed from the bank to Kim Junsu. (‘Toscana’ legal representative Jung Heewon)

Q6. But the construction companies state otherwise.

D. The construction company said in an interview that “Kim Junsu asked to borrow money from the construction companies” and that “On August 4th, 1.87 billion won (CJ) and 3.36 billion won (Cheonji) were borrowed.”

They emphasized that Cheonji received a promissory note from Toscana. The construction companies say “Toscana gave a promissory note that shows Toscana would repay the loans by September 30th, 2014” and “But all attempts to seek repayment have failed, and the debts have not been paid off.”

Q7. Do you have evidence to refute the construction companies’ claims?  

D. The confirmation document on the promissory note is the evidence. It says that there is no repayment value and obligation to Cheonji. Attorney Jung Heewon said, “The promissory note states that ‘This promissory note is for accounting documentation use, and does not have any repayment value in reality’ and was signed by both parties. The seal of Cheonji’s CEO is also stamped on it.”

Toscana executive Park Sungmin said, “The construction companies took only the top part of the promissory note where it states a monetary value and filed a malicious lawsuit. Toscana has the confirmation document that has Cheonji’s CEO’s stamp and yet we were faced with a provisional seizure of property.”

Q8. You described Cheonji’s lawsuit as malicious. 

D. According to Toscana’s side, construction cost was approximately 10 billion won more than the initial cost estimate. They found the reason for that after the hotel opened on September 25th, and that is that the construction companies purchased cheap Chinese made equipment/furniture for the hotel. 

A representative of Toscana said, “We have been preparing a lawsuit for compensation of damages since 3 weeks ago. It was to request the return of the funds we gave to Cheonji” and “Cheonji got wind of the lawsuit and started a smear campaigned. The media outlet that first reported on this, Jeju Domin Ilbo, is a company related to the construction company.”

Q9. However, the Jeju District Courts accepted CJ’s argument

D. Looking at Toscana’s real estate registration, Jeju District Court approved a provisional seizure of property on November 7th. The creditor is CJ Construction, and the amount is 1.87 billion won. To this, Kim Junsu has raised a formal objection.

Jeju District Court’s Judge Kim Jongbum stated, “CJ filed a lawsuit regarding a loan claim. To ensure the loan claim, they applied for a provisional seizure of property as well” and “However because Kim Junsu has raised an objected, the lawsuit will proceed and soon, the truth will be revealed through trial.”

Q10. Looking at the real estate registration, seizure also occurred because of ‘back’ taxes.

D. According to the registration Dispatch obtained, a seizure also occurred on December 3rd and 5th. The owner this seizure is the tax office, and the authorities are Samsung Tax Office Individual Income Tax Office. This is saying that Kim Junsu has not paid some of his income taxes.

Kim Junsu’s side confirmed this. He has not been able to pay a part of last month’s taxes and applied for a deferral. The represenative said, “Over 70% of the taxes have been paid already. The remaining will be paid before the year ends.”

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2 thoughts on “[NEWS] Promissory note was written but the money? 10 misunderstandings revealed

  1. Yeoreum says:

    Thank you for putting this up for more detail about the whole matter!

  2. Maina Edward says:

    I hope this resolves soon… Wish you all the best, Xiah & love you forever. Good Luck & God Bless you!!

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