Jin`s appearance speeds up full-scale investigation of loan scandal

The Seoul District Prosecutor¡¯s Office stepped up its investigation of a financial fraud case involving Jin Seung-Hyun, president of MCI Korea, after Jin turned himself to the prosecution Friday afternoon. Jin had been wanted by police on charges of illegally taking over H&S Investment Bank and manipulating the stock price of Regent Securities.

Prosecutors plan to seek an arrest warrant for Jin on Dec. 2 or 3 on charges of violating the Securities Exchange Law. A high-ranking official of the prosecution said the inquiry on Jin was almost complete and that it was confirmed where Jin spent most of the funds, other than illegal loans from Yeollin Mutual Savings and Finance Co. But the official said the prosecution failed to find evidence to support suspicions that he bribed political and government figures.

The prosecution questioned Jin how he acquired H&S Investment Bank for just US$10 last April and what was the nature of the Swiss Private Bank Consortium (SPBC), which promised to serve as a window for foreign capital introduction for the bank at the time of its acquisition. They also attempted to find out why Jin delivered 2.3 billion won to Shin In-Chol, former president of H&S Investment Bank, and whether he created and managed a secret fund through Shin. Jin was also questioned as to whether he colluded with Koh Chang-Gon, former president of Regent Securities, and James Mellon, chairman of iRegent Group and president of Korea Online (KOL), a holding company for Regent Securities, and rigged the stock price of the securities firm.

Jin reportedly told the prosecution that he has documents outlining the nature of SPBC and proving that the consortium had really intended to invest in H&S Investment Bank but gave up the plan due to unsatisfactory conditions such as its BIS ratio. Jin also said that he manipulated the stock price of Regent Securities at the instruction of Chairman Mellon. The prosecution also questioned Jin on whether he bribed any political and government figures besides Kim Young-Jae, former assistant governor of the Financial Supervisory Service (FSS).

The prosecution plans to conduct an investigation into the illegal loan scandal of Yeollin Mutual Savings and Finance on Dec. 2 after taking over related data from the FSS.