Standard Chartered under probe over Choi Soon-sil scandal

By Jung Min-ho, Nam Hyun-woo

Prosecutors raided the headquarters of a dozen of major banks Monday night to look into financial transactions related to Choi Soon-sil, the central figure in a massive influence-peddling scandal, the prosecution said Tuesday.

According to the Seoul Central District Prosecutor’s Office, prosecutors raided banks including KB Kookmin, Woori, KEB Hana, Shinhan, Standard Chartered (SC) Bank Korea, Industrial Bank of Korea (IBK), Citibank and Nonghyup, as part of their investigation into the snowballing scandal, in which Choi and her accomplices influenced President Park Geun-hye for their own benefit.

“The raid does not seem to be focused on specific allegations,” said an industry source. “It appears that prosecutors are checking all financial institutions for possible connections to Choi.”

Prosecutors have confiscated or requested the financial records of Choi, her family and friends, including Cha Eun-taek, a visual artist suspected of meddling in critical state affairs with her.

Prosecutors hope that the details of their financial records will help reveal how the funds for the Mir and K-Sports foundations were collected and spent. The Federation of Korean Industries (FKI) raised about 80 billion won ($72 million) for the shady foundations from conglomerates. The biggest questions include who is behind the establishment and operation of the foundations and who benefited from the money.

Information from the banks may also help investigators uncover Choi’s wealth, much of which remains a mystery. There have been reports that real estate belonging to the woman and her two sisters, Soon-deuk and Soon-cheon, is worth more than 300 billion won ($263 million), based on certified copies of their real estate register. It is unclear how exactly they accumulated such a great fortune.

Meanwhile, prosecutors have raided three companies Cha allegedly owns ― Africa Pictures, N-Box 8 and Playground ― to look into whether he exploited his friendship with Choi to win government contracts for his business.

Cha, known to be part of the Choi-led secret advisory group to President Park, is also suspected of exploiting his connections to give his cronies important government posts. His college professor Kim Jong-deok served as minister of culture, sports and tourism and his uncle, Kim Sang-ryul, worked as senior presidential secretary for education and culture.

The Financial Supervisory Service (FSS) is conducting its own investigation into KEB Hana, which is suspected of giving special treatment to Choi and her daughter, Chung Yoo-ra, when they borrowed 250,000 euros last year.

The financial regulator is looking into whether any foreign exchange rules were violated in the process of lending and transferring the money to them in Germany. In an interview with local newspaper Segye Ilbo, Choi said she used the money to buy houses and hotels in the country.

Any uncovered violation is expected to pressure investigators to find out whether executives at the bank received anything in return.