BAI urges investigation of company embezzling in national AI project funds

The audit has revealed that officials of a company, engaged in an artificial intelligence (AI) data project with the government's Information and Communication Promotion Funds, has embezzled project funds. On Friday, the Board of Audit and Inspection announced that it had requested the Supreme Prosecutors' Office to investigate three people, including company officials, on charges of business embezzlement and other offenses.

According to the Board of Audit and Inspection, embezzlement by Company A, which executed the project, was identified during an audit of the 'intelligence informatization project implementation status' conducted by the Ministry of Science and ICT and the National Information Society Agency (NIA).

The ministry has been undertaking the “AI Learning Data Construction Project,” investing 2.5 trillion won from Information and Communication Promotion Funds over 10 years, starting from 2017. Among these projects, Company A, responsible for a data construction project aimed at detecting abnormal behavior in livestock using AI, received 3.8 billion won from the funds.

The Board of Audit and Inspection revealed that Company A falsely claimed to have paid for collecting video data from farmers when it actually embezzled 1.39 billion won in project expenses. Mr. B, the company CEO, submitted his business plan to NIA, inviting Mr. C, his father-in-law who served as a director, and a livestock farmer. Additionally, Mr. D, the CEO of another company in charge of executing closed-circuit (CCTV) installation fees to farms, was found to have embezzled funds by giving CCTV installation fees initially to farmers and then transferring them back to his spouse's account. The Board of Audit and Inspection reported that the embezzled funds were used for personal purposes, such as repaying loans.


Kyu-Jin Shin newjin@donga.com