My Korean business partner has been draining our company's account — I'm the foreign investor, based abroad. What are my options?

What you have described is, on its face, both a crime and a civil wrong, and you have real tools as a 45% shareholder even against a majority representative director — including tools you can use without being in Korea. The urgent question is the last one you asked: the assets moving before you act. That is why the first step in cases like this is usually a court order freezing what can still be reached, not the complaint.

What this is under Korean law

Transferring company funds to a personal account or a related company without a proper basis is embezzlement (횡령, hoengnyeong) under Article 355(1) of the Criminal Act; where it is dressed as a transaction that damages the company for another's benefit, it is breach of trust (배임, baeim) under Article 355(2). Because he holds a position of trust as a director, the aggravated forms under Article 356 apply. Where the amount reaches KRW 500 million, the Act on the Aggravated Punishment of Specific Economic Crimes (특정경제범죄법, teukjeong gyeongje beomjoe-beop) raises the minimum sentence to three years' imprisonment. Amounts are aggregated across transfers, so "well over 400 million won" is close to that line and the prosecutor will count carefully.

The civil side: what a 45% shareholder can force

The Commercial Act (상법, sangbeop) gives you more than a vote you would lose.

Books and records: a shareholder holding 3% or more may demand access to the company's accounting books and supporting documents. Refusal can be taken to court, which can order inspection. This is the tool for "the accountant is reorganizing."

Removal and the director's liability: with 55% he can block removal at a shareholders' meeting, but the Act allows a shareholder with 3% or more to petition the court to remove a director for wrongdoing when the meeting refuses. Separately, you can apply for a provisional order suspending him from office and appointing a substitute while the case is pending. And the company's claim against him for the losses — which he will not bring against himself — can be brought by you as a derivative suit on the company's behalf after a demand to the company.

Preservation: a provisional attachment (가압류, gaapnyu) can freeze his personal assets and, with appropriate grounds, funds sitting in the related company. This is the step that answers "can he strip the company first."

The criminal side, from abroad

A criminal complaint (고소, goso) does not require you to be in Korea. Our firm files it under a power of attorney (위임장, wiimjang), notarized and apostilled in the US, together with the evidence, and handles all communication with the police and prosecutor from that point. You may be asked to give a complainant's statement; that is commonly arranged for a visit, or in some cases by written submission through counsel.

The employee's bank statements are what makes this a criminal file rather than a suspicion. Handle them carefully: keep the originals as received, note when and from whom, and do not circulate them. How they were obtained can become an issue; how they were preserved should not.

Your situation as a foreign investor

Your investment is registered under the Foreign Investment Promotion Act; nothing about a dispute with your partner affects that registration. There is no visa dimension for you. The practical dimension is the seal, the bank access and the tax-portal credentials, all of which he controls; a court order for inspection and the suspension of his office are what restore them, not negotiation.

What to do now, and what not to do

Stop asking him for the books by email; you have your written refusal, which is enough. Do not announce the complaint before the attachment is in place. Do not sign anything he sends about "restructuring" or "settling accounts." Assemble: the shareholders' agreement, articles, your investment records, the statements, and every message where he deferred. Then sequence it: attachment and inspection order first, the complaint alongside, the removal proceedings after.

Practical insight

These cases are lost in the gap between discovery and action — the weeks spent "giving him a chance to explain" while the related-company account is emptied. They are won when the first document he receives is a court order rather than an angry email. Foreign minority investors often underestimate their leverage under Korean law because they focus on the 55%; the courts do not.

We handle shareholder disputes and the related criminal complaints for investors outside Korea and can begin from a single video call — by text consultation or at +82-2-522-3959.

— MEGA X Law Firm Korea, Corporate Disputes Team