Prosecution embarks on investigation of KDL

The Seoul District Prosecutor¡¯s Office said Tuesday that it embarked on an investigation of Chung Hyun-Joon, president of Korea Digital Line(KDL), on suspicions that he took out huge illegal loans from Dongbang and Daeshin Mutual Savings and Finance Cos. and used a large amount of the money to lobby politicians and officials of the Financial Supervisory Service.

The prosecution said that chances are high that Chung bribed some officials of the FSS who overlooked the illegal loan case, so its probe will focus on shedding light on these suspicions.

Tuesday, prosecutors summoned FSS officials suspected of being involved in the case for questioning and plan to call in other suspects such as Chung, Yoo Jo-Woong, president of Dongbang, and Lee Soo-Won, president of Daeshin, within this week.

The prosecution also asked the Justice Ministry to impose travel bans on six to seven suspects, including Chung, Yoo, Lee Soo-Won and Lee Kyong-Ja, vice president of Dongbang.

Among these suspects, the whereabouts of Yoo remain unknown, the prosecution said. Employees of Dongbang said that President Yoo left for an unknown destination Oct. 21 carrying a big bag and taking his family with him. The prosecution plans to question Chung on charges of manipulating the stock prices of some of his companies, including KDL, and taking out illegal loans worth tens of billions of won from Dongbang and other financial institutions by offering these stocks as securities. It also plans to conduct an investigation into Chung¡¯s allegations that Vice President Lee of Dongbang lobbied high-ranking officials of the FSS and politicians.

Prosecution officials said that Chang Rae-Chan, former director of the FSS non-banking sector investigation bureau, will also be summoned soon as the FSS reveals that Chang invested 100 million won in a private fund set up by Chung for the purpose of manipulating the stock price of Pyongchang Information Technology.