Prosecutors summon investors in Chung Hyun-Joon Fund

The Seoul District Prosecutor's Office Thursday summoned for questioning some investors in the private fund created by Chung Hyun-Joon, 32, president of the bankrupt Korea Digital Line, and his close aides, in its investigations into the illegal loan scandal involving Chung and Dongbang Mutual Savings and Finance Co.

Lee Ki-Bae, third deputy chief prosecutor at the prosecutor's office, said the investors in the fund were subpoenaed because Chung testified that they included government officials and journalists.

However, Lee said they did not determine that politicians such as former and incumbent lawmakers invested in the fund.

The prosecutors also confronted Chung and his chief secretary, Lee Won-Geun, with Lee Kyong-Ja, vice chairwoman of Dongbang Mutual Savings and Finance Co., during their interrogation.

Ten of the fund subscribers were brought in for questioning on the exact procedures of their investments.

The prosecutors also confirmed that Chung enjoyed about 100 billion won in profits through margins from stock market quotations by operating the fund since last year. They are investigating the details of his property.

They also found that the six pages of notes left by Chang Rae-Chan, former chief of the non-banking inspection bureau of the Financial Supervisory Service (FSS), who committed suicide, were not written on the same day, indicating that their contents were unconvincing. They are now searching for those who contacted Chang before his death and investigating the details of his telephone conversations.

The prosecutors secured a statement from a Lee, 55, wife of the late Chang's former senior at the FSS, that Chang invested 700 million won and 10,000 shares of Digital Impact and she also invested in the KDL on Chang¡¯s advice, only to suffer a 1 billion won loss. Lee was summoned on Wednesday.

The prosecutors also summoned five FSS officials, including a Kim, chief of a team at the review and discipline bureau, to investigate eased disciplinary measures after the financial watchdog¡¯s special inspection on the Daishin Mutual Savings and Finance Company's illegal loan and the issuance of BWs of Yuil Semiconductor at low price.

sooh@donga.com