By Kim Tae-jong
Staff Reporter

Prosecutors are expanding their investigation into the corrupt business practices of a wider range of public services firms, a move seen by some to help pave the way for the privatization or rationalization of the bloated firms.

Korea Tourism Organization (KTO) also fell prey to the probe as prosecutors raided its subsidiary casino operators, including the headquarters of Grand Korea Corporation (GKL) in Samsung-dong, southern Seoul and the residence of the company's former president Park Jung-sam. Park has been banned from leaving the country.

Through the raids, the prosecution focused on securing evidence for KTO's unfair selection of casino operators and GKL's executives' embezzlement. Among financial firms, the Export-Import Bank of Korea is included on the blacklist.

On Tuesday afternoon, prosecutors arrested Kim Jae-ho, assistant director of the Public Procurement Service (PPS), for bribery. He is the first ranking official to face arrest since the inauguration of the President Lee administration. Kim allegedly received approximately 57 million won in bribes from the president of a construction company from September 2006 to March 2008. Upon his arrest, the procurement agency Wednesday issued an apology.

Meanwhile, the tax authority Wednesday announced it plans to launch an audit of the Korea Electronic Power Corp. and the Korea Hydro and Nuclear Power Corporation.

Following the launch of the Lee Myung-bak administration, prosecutors have targeted public firms to uproot alleged irregularities.

But the move also reflects political motivation to replace incumbent public firms' heads, mostly appointed by the former administration, and reduce opposition to the privatization of public firms.

Since the intensive probe began earlier this month, prosecutors have raided the headquarters of major public firms, including Korea Exchange, Korea National Oil Corp. and Korea Asset Management Corp. and investigated key figures from them.

Currently, some 300 public services companies operate in Korea.

e3dward@koreatimes.co.kr