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Venture `Stock Bribe` Creates a Stir

Posted August. 09, 2001 08:47,   


The Board of Audit and Inspection of Korea has caught a large scale of civil servants who received `stock bribe`.

The Board had investigated 15 public bodies including government-run bank from March 12th to April 9 and found 66 people who earned a huge amount of unfair profit from the sales of stock. They provided various kinds of convenience for venture companies such as loans, sales contraction and approval of loans. And they bought the venture`s stock when the stock price was not revealed yet. By this, they were able to earn a huge margin.

The Board requested for a legal investigation on 6 people whose charges are serious, 28 related public bodies for an official sanction, and publicize the related 32 people who are involved indirectly.

The related organization are as follows: Small and Medium Business Administration, Small and Medium Business Bank, Small and Medium Business cooperation, Han kook Foreign Currency Bank, SanUn Capital, Hanjun KDN, Uiwhan Credit Card, Han Kook Public electricity and communication company.

@ Type and Example = According to the Board of Audit and Inspection of Korea, Mr. Kim (the executives of SanUn Capital) arranged a contract of 100million Won stock sales with a venture company. And he bought 500 stocks with the name of his relative and earned a margin of 27 million and 99 thousands Won.

4 people of Kook Min Bank, including Mr. Kim, a branch manager, loan out total 27 million Won to a venture company and bought 20thousands of stock with 300 Won lower than the original price and received 10 thousands of stock for free. They earned 16million and 659 thousands of margin.

Another Mr. Kim of Small and Medium Business Administration is suspected to earn 64million and 998 thousands won from the sales of a venture company`s stock. He approved the loan to this company. After that, he bought 1000 stock with 40000 won price and gained a huge margin after the stock was registered in Kosdak. He is also charged of being a broker, he received 4000 stock from the company and tried to sell these to his 9 working companies.

@ The late announcement by the Board of Audit an Inspection of Korea.

An official said,``We originally planned to announce this after September afraid of the influence of this event to the stock market, however, we decided to announce it early since Dong A Il Bo reported this event on 8th.``

The Board also responded to the opinion that the punishment is too light, saying, ``It is difficult to punish them since it is hard to legally regard the stock as bribe when the stock price has not made yet. But we will have a further investigation on the related bodies who do not follow the Board`s request for punishment.``

Boo Hyung-Kwon bookum90@donga.com