POSCO headquarter raided

By Lee Kyung-min

The prosecution Friday raided the headquarters of POSCO Group as part of its investigation into the alleged creation of slush funds and improper merger and acquisition (M&A) deals involving former and incumbent key officials of the firm, including ex-Chairman Chung Joon-yang.

Investigators from the Seoul Central District Prosecutors’ Office raided the company office in southern Seoul and seized computer files, account books, and documents concerning the firm’s M&A deals.

The prosecution believes several former and incumbent executives raised slush funds through some of the group’s subcontractors. It is also alleged that they exercised undue influence when the company took over Sungjin Geotec, the predecessor of POSCO Plantec, in 2010 paying much higher than the going market rate.

After the raid, prosecutors are likely to summon suspected officials including Chung. The probe may widen to include policymakers of the former Lee Myung-bak administration who were allegedly involved in the group’s corruption.

Earlier in the day, the prosecution raided the head office of Dong Yang Construction in Pohang, North Gyeongsang Province, the offices of six of its affiliates in Daegu and Gyeonggi Province, in addition to the home of the company chairman, surnamed Bae.

Dong Yang Construction is one of the subcontractors suspected of raising money for POSCO’s alleged slush fund alongside Kosteel and Sungjin Geotec.

In May, former POSCO Engineering and Construction Vice Chairman Chung Dong-hwa was questioned over his alleged involvement in the scandal.