By Kim Rahn
The prosecution’s ongoing investigation into POSCO’s alleged creation of a slush fund is causing anxiety to several other conglomerates that are suspected of conducting corrupt activities.
As the government has declared an “all-out war” against corruption, there is rampant speculation over which firm will be next.
Sources say that the prosecution may dig deeper into slush fund allegations involving Shinsegae, Kumho Asiana and Dongbu groups.
Prosecutors started looking into suspicious money flows among affiliates of Shinsegae Group last May at the request of the financial authorities. They suspect Shinsegae sold gift vouchers at lower prices than face value to create a slush fund worth hundreds of millions of won.
Kumho Asiana Group Chairman Park Sam-koo has also been under suspicion that he embezzled more than 10 billion won in company funds and created a slush fund through inter-subsidiary deals.
Financial authorities also found suspicious money deals involving Dongbu Group in 2013. Prosecutors suspect Dongbu Chairman Kim Jun-ki stashed billions of won in slush funds by paying salaries to non-existent “ghost employees” since 2005.
The prosecution is now focusing on POSCO.
Prosecutors said Monday that they have been questioning former and incumbent executives of the group since Sunday in their investigation into allegations involving POSCO Engineering & Construction (E&C).
Some executives of the construction unit in charge of projects in Southeast Asia allegedly created slush funds worth 10 billion won by inflating the costs of building expressways in Vietnam between 2009 and 2012 in collusion with local subcontractors.
Prosecutors first summoned the executive who was head of the company’s Vietnam branch, surnamed Park, and several working-level employees in charge of finance and overseas projects.
Former POSCO E&C Vice Chairman Chung Dong-hwa, who was CEO of the company at that time, may be also summoned.
After questioning working-level and ranking officials, the prosecution will consider quizzing former group Chairman Chung Joon-yang, as the allegations took place under his leadership. Prosecutors have already banned him from traveling overseas.
The probe may put pressure on current Chairman Kwon Oh-joon, even though he is not directly involved in the allegations, because it will have partial influence on the group’s ongoing restructuring and overseas projects.
Kwon issued a statement Monday, saying he will cooperate with prosecutors.
POSCO was a state-run company but is now a private enterprise. Controversy has continued over the administration’s influence on the group, as whenever a new government comes in to power the group’s chairman is replaced, with the company facing investigations by the prosecution or tax authorities.