Prosecution embarks on investigation of ¡®Jin Seung-Hyun¡¯ scandal

The prosecution is conducting a full-fledged investigation into an illegal loan scandal involving a venture businessman, Jin Seung-Hyun, and Yeollin Mutual Savings and Finance Co., sources said Friday.

Jin, 27, vice chairman of MCI Korea and the largest shareholder of the mutual savings firm, allegedly obtained 37.7 billion won in loans illegally.

Following the ¡°Chung Hyun-Joon Gate¡± scandal, which involved the illicit loans of Dongbang Mutual Savings and Finance Co., the Yeollin case shows signs of escalating into ¡°Jin Seung-Hyun Gate.¡±

Prosecutors found that Jin formed a 2-billion won slush fund in the course of taking over Hans Banking (formerly Asia Merchant Banking) and were looking into why he made the secret fund and how he used it, the sources said.

The prosecutors are also investigating the allegation that Jin reaped huge profits illegally through manipulating stock prices. They banned Jin from leaving the country on Sept. 2 and organized a special task force to arrest him.

Meanwhile, the Financial Supervisory Service Friday suspended the operations of Yeollin Mutual Savings and Finance Co. until May 23 next year. The financial watchdog will file criminal complaints with the prosecution against Jin and five others, including Hwang Kyu-Baik, president of Yeollin.