Loan scandal suspect expected to appear this weekend

The Seoul District Prosecutor¡¯s Office, currently investigating the illegal loan scandal involving MCI Korea president Jin Seung-Hyun, confirmed Wednesday that Kim Young-Jae, assistant vice-chairman of the Financial Supervisory Service (FSS), received additional money from Shin In-Chul, former president of H&A Investment Bank (formerly Asian Banking) besides the 49.5 billion won he was known to have accepted from Shin.

A prosecutor said that Kim is suspected of accepting an additional US$10,000 from Shin and the prosecution plans to indict Kim Thursday after confirming the total amount of bribes he received. The prosecutors are looking into whether Shin formed a slush fund when he was a standing auditor of Asian Banking Corp. at the instruction of Sull Won-Shik, then largest shareholder and former chairman of Taihan Textile Sull is currently staying abroad.

They will also investigate whether Shin, if he created the secret fund, used it to lobby Kim and other FSS officials in order to prevent the liquidation of Asian Banking. They said that Jin indirectly expressed his intention to appear before the prosecutor¡¯s office sometime this weekend after repaying 27.8 billion won of the loans he withdrew illegally from Yeollin Mutual Savings and Finance Co. Jin¡¯s expected voluntary appearance before prosecutors will speed up the investigation into allegations of Regent Securities¡¯ stock price manipulation, slush fund creation and the lobbying of FSS, politicians and other government officials, a prosecutor said.

Lee Soo-Hyung sooh@donga.com