By Kim Rahn
Staff Reporter
Prosecutors Sunday arrested a former Hyosung Group manager for embezzling money which they suspect made up a slush fund for the group.
The arrest comes amid the prosecution's investigation into the group's alleged slush fund. Hyosung Chairman Cho Suck-rai, who is also the chairman of the Federation of Korean Industries, is related to President Lee Myung-bak by marriage.
A local court issued an arrest warrant for the former worker, identified as Yun, who was in charge of accounting, saying he was likely to flee or destroy evidence. Yun allegedly misappropriated 1.5 billion won in company funds in 2005 and spent it on stock investment and gambling.
Prosecutors suspect the money might be part of Hyosung's slush funds, considering the company tried to close the case by dismissing Yun and not reporting it to the law enforcement authorities to get the money back from him.
``The case is about personal corruption for now, but we don't know how it will develop. The probe may expand to Hyosung executives,'' a prosecutor said.
He said the prosecution would examine whether the group raised tens of billions of won for the slush fund and, if so, what it spent the money on.
Earlier this year, the Anti-Corruption and Civil Rights Commission asked the prosecution to investigate the group, following a whistleblower's tip that Hyosung created a 20-30 billion won slush fund through its local subsidiary in Japan.
The Korea Financial Intelligence Unit also detected suspicious money transactions by the group and reported this to the prosecution. Prosecutors have summoned the company workers in charge of finance and accounting since October.