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Simple Fraud Case? Who Believes It?

Posted September. 08, 2000 18:22,   


The illegal loan scandal involving Hanvit Bank is likely to be wrapped up as a ¡°simple loan fraud¡± masterminded by Park Hye-Ryong, representative of Ark World, and Shin Chang-Sop, chief of Kwanak branch of Hanvit Bank, who have been under arrest.

The Seoul District Prosecutor¡¯s Office said that no trace of influence-peddling or pressures from the outside for the huge loans in the scandalous affair. The office was scheduled to announce the result of its investigation on Friday.

Yet, the prosecutor¡¯s office has been under fire for its passive attitude in finding the truth because suspicions involving the scandal have not been cleared away.

Since the case was first reported by the press on August 24, speculations have arisen over the motives of lending the loans, how the money was spent, influence-peddling and pressures from influential figures outside.

Unresolved Suspicions

Motives of Lending Loans: One of the biggest unresolved suspicions is that the motive of Shin¡¯s extending the illegal loans has not been clarified clearly.

A prosecutor said, ¡°Shin made up his mind to use Park who he believed was a nephew of a government minister. It also seemed that Shin gave the illegal loans as he believed the withdrawal of the loans was possible because the management of (Park¡¯s) Ark World would be normalized soon.¡±

However, suspicions take place one after another, considering the amount of the illegal loans and the method of lending them.

How the loans were spent: The prosecutor¡¯s office said, ¡°Park said he invested 7 billion won out of 20.5 billion won of loans he obtained illegally in some companies, including a firm manufacturing taps, but failed to withdraw the money, so he had to draw more loans.¡±

But a Mr.Om, who was an employee of the tap maker, said, ¡°The company already went bankrupt in October 1990, and it lacks logic that Park invested in the company.¡±

This claim of Om rekindles a suspicion that some of the loans might be used as price for the outside pressures on the bank to offer the loans illegally.

Outside Pressures or Influence-Peddling: The latest investigation of the prosecutors shows that Lee Su-Gil, 55, a vice-president of Hanvit Bank, was in the center of the suspected pressure from the outside. A prosecutor admitted that there might be a suspicion about Lee¡¯s role concerning the alleged pressures. A bigger suspicion about the behind-the-scene figure is seen to be calmed down only when the prosecutors find the truth about the alleged involvement of Lee in the scandal.

Response from Legal Circle

Lawyer Lee Suk-Yun, secretary general of ¡°Kyongsillyon,¡± or Citizens Alliance for Economic Justice, said ¡°Unless various suspicions are not clearly resolved, many people will think it dubious and the political suspicion will be amplified.¡±

¡°The prosecutor¡¯s office should not attempt to wrap the case hurriedly, but continue to probe to find the truth in an objective and fair position,¡± Lee claimed..