Hyosung Group Chairman
Cho Suck-rai |
Focus Turned on Assets Held by CEO’s Children
By Park Si-soo
Staff Reporter
The prosecution has resumed its investigation into allegations that the Hyosung Group's owners created a slush fund through subsidiaries at home and abroad.
The resumption comes 20 days after opposition legislators and activists alleged the original probe into suspicious funds created by the family was ended hastily due to a marital link with President Lee Myung-bak.
The Seoul Central District Prosecutors' Office said Monday it would take a closer look at how Hyosung CEO Cho Suck-rai's children secured the money needed to purchase luxurious houses in the United States.
"Our investigation is focused on suspicious real estate in the U.S. owned by Cho's children," said a prosecutor involved in the case.
Although prosecutors opposed the reopening of the case, many law experts and activists say this inquiry will eventually lead to the resurfacing of other interlocked deals, making it virtually a re-investigation.
Based on tips from a Korean living in the U.S., the prosecution suspects that Cho's children bought at least four luxurious houses there between 2002 and 2008 for $10 million, using part of the alleged slush fund.
At that time, Korean citizens were banned from buying overseas property worth more than $3 million.
Of the houses, one in San Francisco (worth $1.8 million) owned by Cho's eldest son, Hyun-joon, president of Hyosung Corp., and another in Hawaii (worth $2.62 million) owned by his third son, Hyun-sang, are now up for sale, the prosecution said.
Prosecutors are seeking the help of American authorities to assist in the checkup.
A parliamentary inspection of the Ministry of Justice and the prosecution last week played a great role in pressuring the authorities to carry out the investigation.
Last week, opposition legislators condemned the justice minister and prosecutor general for what they called "cover-up" attempts, citing the owner family's relationship with President Lee.
A nephew of the Hyosung CEO, currently chairman of the Federation of Korean Industries, tied the knot in 2001 with President Lee's youngest daughter.
Following the inspection, Prosecutor General Kim Joon-kyu called a couple of opposition legislators and promised to make all-out efforts to shed light on the "truth."
The justice minister also said the ministry will make an effort to extradite a person from the United States who is suspected of playing a key role in creating the slush fund to buy real estate there.
Hyosung is suspected of creating tens of millions of dollars in a slush fund, using offices in the United States, Hong Kong and Singapore. The country's 30th-largest company was also suspected of evading taxes through accounting irregularities.
In addition, in early 2008, the Anti-Corruption and Civil Rights Commission asked the prosecution to investigate the group, following a whistleblower's tip that it had created a 20-30 billion won slush fund through a subsidiary in Japan.
The Korea Financial Intelligence Unit also detected suspicious money transactions by the group and reported them to the prosecution.
Based on the information, the prosecution started investigations into the Hyosung case in September last year.
Three month later, it arrested a former Hyosung manager for embezzling 1.5 billion won, which was allegedly part of the slush fund.
pss@koreatimes.co.kr
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무디스, 스페인·伊·포르투갈 신용등급 강등
