By Kim Rahn
Staff Reporter
An elder brother of former President Roh Moo-hyun is under investigation for alleged influence-peddling in a deal involving the sale of Sejong Securities to Nonghyup in 2006, when Roh was in office.
It was alleged that two subordinates of the former President received kickbacks from a Sejong CEO. Chung Hwa-sam, one of Roh's high school alumnae, and his brother, Chung Kwang-yong, had indicated they would seek the influence of the President's brother Roh Geon-pyeong, who was close to then-Nonghyup chairman Chung Dae-kun.
Investigators have yet to verify whether Roh's elder brother had actually peddled his influence to facilitate the sale. The senior Roh was banned from traveling overseas.
Prosecutors arrested the Chung brothers for alleged bribery taking and abuse of power.
The largest opposition Democratic Party claimed the probe attempts to implicate Roh in irregularities that have nothing to do with him, while the ruling Grand National Party (GNP) has called for a thorough investigation to root out corruption involving the former president's aides.
A local court issued arrest warrants for the two on charges of receiving bribes in return for facilitating the sale of Sejong Securities to Nonghyup in 2006 at a higher price.
The Chungs allegedly took three billion won ($2.5 million) from Hong Ki-ok, former CEO of Sejong Capital, in return for exercising influence to help Hong sell his company. Hong was arrested last week.
In the scandal, Park Yeon-cha, a strong supporter of Roh, faces questioning over a stock deal. The CEO of Busan-based shoe company Taekwang allegedly raked in 10 billion won after buying Sejong stocks before the acquisition deal and reselling them after the sale was completed. Prosecutors suspect he exploited insider information to reap the huge gain.
It was found that the Financial Supervisory Service had already probed allegations against Park in 2006 and concluded he had not used such information. The prosecution will re-investigate it.
Park denied the allegation, but admitted that he evaded tax by purchasing parts of the shares under borrowed names, saying he would pay the overdue taxes.
In a separate case, the prosecution will investigate another tax evasion allegation of Wooridul Life Science, a pharmaceutical firm run by the wife of one of Roh's aides, Wooridul Spine Hospital chairman Lee Sang-ho.
Lee and the hospital became famous in 2003 when he treated Roh's disk ailment. Prosecutors said that the National Tax Service had reported to the prosecution that the pharmaceutical company and five to six firms related to it evaded about one billion won in tax.
Lee's wife is the head of Wooridul Life Science and Lee is its second largest shareholder. The tax agency has inspected the hospital group since August for its alleged tax evasion and slush funds creation. There have been rumors that the hospital group received favored treatment from the Roh administration, and the GNP demanded the National Assembly conduct a special probe into the hospital in 2006.