List of private fund investors under investigation: prosecutors

The Seoul District Prosecutor¡¯s Office investigating the illegal loan scandal of Dongbang Mutual Savings and Finance officially announced Monday that it has obtained and is investigating the list of people who invested money in a private fund set up by Chung Hyun-Joon, president of Korea Digital Line (KDL).

Chung allegedly set up the fund worth about 7 billion won for investments in venture businesses.

¡äInvestigation into the recruitment of investors in private funds and lobbying allegations = The prosecution said that the fund is made of 70 accounts. In some cases, several people invested together in one account while in other cases, one person made investments in numerous accounts, they said.

Prosecution officials said that the private fund is different from a fund worth 2 billion or so, which was set up by Chung for the manipulation of Pyongchang Information Communication¡¯s stock prices, adding that they obtained the list from Chung.

However, the officials did not say how many people subscribed to the accounts, nor whether the list includes leading figures in political and financial circles. They also refused to confirm if the fund is the same private fund reported (on the A1 page of our newspaper on Oct. 30) to have been invested in by about 500 people including leading political and government figures.

The prosecution summoned Chung¡¯s chief secretary identified only as Lee and an aide known as Kang. They questioned Lee and Kang to find out how Chung raised funds to merge or acquire about 10 venture businesses in a short period of time and whether Chung operated a secret organization for the purpose of recruiting investors in private funds and lobbying.

Prosecutors plan to closely examine the list of the fund¡¯s investors and investigate whether they have illicit connections with Chung, before deciding whether or not to take actions against those found suspected.

¡ä Investigation on the suspicion of the Financial Supervisory Commission¡¯s attempt to cover up the scandal = The prosecution also called in some officials in the inspection bureau of the FSS to investigate the allegations that FSS officials had decided to file a complaint with the prosecution against Chang Sung-Hwan, 39, president of Yuil Semiconductor, in connection with the company¡¯s issuance of bonds with warrants (BW) at low prices but withdrew the plan after they were bribed by Chung. The FSS only warned Yuil of the act. Seeking an arrest warrant for Chang, the prosecution said that Chang is suspected of having offered about 1 billion won in bribes to FSS officials through Chung and Lee Kyong-Ja, vice chairman of KDL, while the FSS was moving to file a complaint against him with the prosecution.

Prosecutors also said that when he appeared before the prosecution, Chang presented falsified BW documents to investigators in an attempt to avoid the bribing charges.

The prosecution also summoned two or three FSS officials including one identified as Oh to find out why the FSS reduced the level of its disciplinary action against those involved in the illegal loan scandal and ignored a recommendation to conduct an investigation into the scandal¡¯s possible links with Dongbang. The FSS officials were in charge of a special inspection on Daeshin Mutual Savings and Finance last December.

The prosecution decided to prosecute Lee Su-Won, 44, president of Daeshin, who himself turned in Sunday, on charges of extending illegal loans worth 10 billion won to Chung, the company¡¯s largest shareholder. They also said that as a result of the investigation so far, they have discovered that Lee and Chung took out about 55 billion won more in illegal loans than reported up to now.

Meanwhile, the prosecution said that Lee appointed Yo Sang-Kyu, former lawyer of Kim Hyun-Chul, the second son of former President Kim Young-Sam, to represent her in the case.