By Park Si-soo
Staff Reporter
Close aides to former President Roh Moo-hyun have been under investigation on suspicion of bribery, stock price manipulation and abuse of power.
The prosecution Sunday sought an arrest warrant for Chung Hwa-sam, 62, one of Roh's high school alumnae who owned a golf course on Jeju Island, and his brother Chung Kwang-yong, 54, on suspicion of taking bribes in exchange for favoring the sale of Sejong Securities to Nonghyup in 2006.
According to the prosecution, the two received billions of won from a former CEO of Sejong Capital identified as Hong ahead of its sale to Nonghyup.
``Hong gave the money to the Roh's cronies in return for influencing the deal to sell his company at a higher price,'' a prosecutor said.
Prosecutors also confirmed Park Yeon-cha, 62, CEO of Busan-based shoes manufacturer Taekwang Ind., had reaped huge capital gain by buying Sejong stocks ahead of its acquisition deal. The stock prices gained by nearly 10 times after the sale. It is suspected that he exploited insider information to buy Sejong stocks before the deal and sell them after the transaction.
The illegal gain is estimated at around 10 billion won ($6,644,000), prosecutors said, adding Park will be summoned for questioning.
Park has been known as one of the three most closest aides to Roh along with Kang Keum-won, chairman of Changshin Textile, and the older Chung.
A series of illegalities committed by Roh's aides were uncovered after prosecutors raided Sejong Capital headquarters in Seoul and several private lending firms under Sejong Capital's control, Wednesday, to secure ledgers and computer disks that may contain information about the behind-the-scene deals.
Kim Hyung-jin, owner of Sejong Capital and former chairman of Sejong Securities, was arrested that night for allegedly taking part in manipulating the stock of Hankook Cosmetics, in which Sejong Securities was the second largest shareholder.
In October 2005, Sejong Securities purchased shares of Hankook Cosmetics to become the second largest stakeholder with a 14.7 percent stake in the firm.
Then, stock prices of the cosmetics firm suddenly jumped to over 3,000 won from 970 won and prosecutors suspect the questionable increase was made as a result of stock price manipulation, in which Kim was involved.
In a separate case in 1999, Kim was indicted on charges of unauthorized trading of corporate bonds. He was convicted in the case.