GNP blasts gov¡¯t support for rich venture firms

Most of the funds that the Ministry of Information and Communication raised for new venture companies since 1998 were inappropriately used to support chaebol-related venture firms. According to audit material released by Rep. Won Hee-Ryong of the Grand National Party on Sunday, out of the 89.7 billion won raised by the ministry's 20 venture capital firms, 18.5 billion won or 21% has been used to support chaebol-related or "rich" venture companies and to buy stocks.

A venture capital fund known as MIC 99-8 invested 5.1 billion won out of its total 11.9 billion won in chaebol-related venture companies. The LG venture capital fund I has also invested 800 million won and 2.2 billion won in stocks and chaebol venture companies out of a total 5.1 billion won.

Last May, The Board of Audit and Inspection criticized the loose contracts between the Ministry of Information and venture capital firms, which limits their investments in new venture companies to 30%, calling their investments inappropriate and ordering them to make changes. However, the ministry did nothing to improve the situation except to adjust the investment ceiling to 40%.