By Kim Rahn
Prosecutors questioned the head of the petrochemical unit of Kumho Asiana Group, Friday, on suspicions of reaping improper financial gains through a slush fund and using insider information.
He denied the allegations but hinted at a slush fund created by the group, not by his company. His remarks indicate the investigation may expand to include the group run by his brother.
Park Chan-koo, chairman of Kumho Petrochemical, presented himself at the Seoul Southern District Prosecutors’ Office in southwestern Seoul for his alleged breach of trust, embezzlement and the violation of the Capital Market Law.
On the suspicion of starting a slush fund, Park told reporters that it was not true. When asked whether the investigation was related to Kumho Asiana Group, run by his elder brother Sam-koo, he said, “It is. I’ll talk to prosecutors.” He also said he thinks the group was involved in the slush fund creation.
When asked about allegations that he sold Kumho Industrial’s stock by taking advantage of undisclosed information, Park said, “I’ll answer the prosecutors.”
Park is suspected of having created a slush fund by fabricating figures involving deals with subcontractors, mainly operated by his relatives or acquaintances. Prosecutors estimate the slush fund and the corporate money he embezzled to stand at 30 billion won ($27 million).
Prosecutors interrogated him about how and for what reason he raised a slush fund and exactly how much money was in it.
The chairman is also suspected of having embezzled company funds.
In June 2009, Park allegedly sold all of his shares of Kumho Industrial before the stock price dropped on information not available to the public. If he hadn’t sold then, he would have suffered more than 10 billion won in losses, according to the prosecution.
In April, the prosecution raided the petrochemical firm’s headquarters in central Seoul and four subcontractors, and has questioned officials of those companies over the slush fund allegations. At that time, Park claimed his innocence, saying, “Somebody else is to blame. You guess who it is.”
Park’s remarks hint at Kumho Asiana Group’s implication in the corruption allegations. Market watchers say this comes from the antagonism between Park and his brother Sam-koo, battling for power in 2009.
Regarding the group’s alleged involvement, group officials said they couldn’t comment on the issue until the results of the investigation are released.