Corruption Probe Targets Uri Lawmaker

Prosecutors investigating corruption allegations surrounding the development of a Dankook University site in Hannam-dong, Yongsan-gu, Seoul, heard testimony yesterday that a representative with the company in charge of the development project gave several hundred million won to an Uri Party assemblyman.

According to the testimony, the lawmaker accepted the huge consulting fees despite a possible conflict of interest relative to the project.

Criminal Investigation Team One (led by Senior Prosecutor Jeong Byeong-du) of the Seoul Supreme Prosecutors’ Office is investigating why the assemblyman took the money.

Kim Yeong-cheol, the assistant prosecutor-general in charge of the investigation said that the office is verifying if such a deal was appropriate, even if the assemblyman acted as a private citizen.

Prosecutors called in an employee of the Korea Deposit Insurance Corporation, which owns 85.6 billion won worth of Dankook University bonds to ask why the corporation stopped its public disposal of the bonds, which resulted in an application of the statute of limitations in 2004.

Assistant Prosecutor-general Kim said that the prosecutors must investigate if there was any illegal activity during the liquidation of than 80 billion won in bonds.

Another prosecutor said that the university bonds were not even junk bonds, because profit certificates for the sale of the land issued by the Korea Real Estate Trust warranted the bonds. He questioned why the Korea Deposit Insurance Corporation did not take any measures when litigation could have lengthened the prescription duration by ten years.

Prosecutors think that Kang and his associates took over the junk bonds through a private contract and prevented the disposal of bonds in cooperation with Korea Deposit Insurance Corporation employees to pursue the development of the land.

Prior to the testimony, prosecutors searched the office of junk bond liquidation team of the Korea Deposit Insurance Corporation, the home of team head Lee, and Shinhan Finance Company and confiscated papers.

The Korea Deposit Insurance Corporation responded that it tried to sell the bonds in 2001 and 2004, but that their were no takers and that the prescription duration had been lengthened by another ten years due to court ruling in November 2003.