Taekwang Chairman Summoned
Ex-President's Supporter Park Faces Arrest Warrant
Park Si-soo
Staff Reporter
The prosecution Wednesday summoned Park Yeon-cha, chairman of sneaker maker Taekwang, who is at the center of the influence-peddling scandal involving former President Roh Moo-hyun's elder brother, who was arrested last Thursday.
Park appeared at the Supreme Prosecutors' Office in Seoul at 8 a.m. and entered the building without any comments for reporters.
Prosecutors said they would seek an arrest warrant if deemed necessary.
The questioning was focused on whether the tycoon manipulated stock prices using insider information or created slush funds to bribe politicians and government officials. He is also suspected of having evaded billions of won in taxes.
According to prosecutors, the former president's long-time supporter allegedly raked in 20 billion won ($15 million) in investment gains by purchasing Sejong Securities shares before its acquisition by Nonghyup in 2006 and sold them afterward. He has admitted he bought some shares in the stock brokerage firm under false names to evade tax but denied exploiting the company's business secrets.
Prosecutors suspect the huge gains came as a result of insider information exploitation ― presumably tips from either the former President's elder brother, Roh Geon-pyeong, or then-Nonghyup CEO Chung Dae-kun, who was also arrested.
Prosecutors also questioned him over whether he had delivered 2 billion won in bribes to the former Nonghyup head to take over a Nonghyup's affiliate at a lower than market price.
Taekwang took over Huchems, a Nonghyup affiliate, at a bargain price in July 2006, and it was confirmed that Park gave 2 billion won to Chung before the deal, though he was recently reimbursed.
The prosecution speculates the business leader evaded huge taxes during the former President Roh's presidency, which lasted from 2003 to 2008.
Prosecutors have confirmed he evaded taxes through a paper company in Hong Kong and other means. Prosecutors estimate the total amount of illegally obtained money reached over 70 billion won. They consider the money a slush fund, suspecting Park used it to lobby politicians and government officials to facilitate the acquisition of Huchems and other businesses.
They have intensified their scrutiny of Park's alleged tax evasion, as the National Tax Service recently accused him of evading 20 billion won in taxes through fake deals between its domestic and overseas business units.