Prosecution Investigates former Haitai Group head

On August 30, the Seoul District Public Prosecutor¡¯s Office summoned the former chairman of Haitai Group, Park Kun-Bae, for questioning on charges of having secretly hoarded 1.9 billion won during the process of selling the group`s training institute. According to the Prosecutor¡¯s Office, former chairman Park allegedly formed a secret fund by stashing away 1.9 billion won while selling the Haitai Training Institute, in Gwangju, Gyeonggido, to the Hyundai Group in December 1997, after his group had gone bankrupt and he became the director of the organizational restructuring headquarters. In his tenure as director, he evaluated the price of the building as 17 billion won and the price of furniture inside as 2 billion won. The secret fund came from the latter estimate.

The Prosecutor¡¯s Office maintains that former chairman Park conspired with the president of a furniture supplying firm to disguise the actual price of the furniture, and manipulated the account books to inflate the price of the goods, actually worth 100 million won, to over 2 billion won. A related source at the Prosecutor¡¯s Office said, "This money has not come into the company`s bank accounts until now, and we are conducting an investigation to determine how Park concealed the money and where he intended to use it." The Prosecutor¡¯s Office is also probing suspicions that former chairman Park established ghost affiliate companies and secretly hid company money or misappropriated the funds personally. The Prosecutor¡¯s Office plans to file an arrest warrant on the charge of misappropriation on Thursday in the event that the allegations regarding former chairman Park are confirmed.