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Suspicion of External Pressure by Influential Figures from Government and Financial Circle

Suspicion of External Pressure by Influential Figures from Government and Financial Circle

Posted September. 25, 2001 08:37,   


It is reported that G&G chair man Lee Yong-Hoo had received as much as 6.7 billion won of private Loan, offering unstable stocks and Convertible Bonds (CB) as security in May~July, 1999 from Kookmin bank with names of employees who work for his branch companies.

The loan was about 260 million~300 million won, and it is raising doubts whether G&G intentionally arranged the loan amount under 300 million won so that it can be free from the bank headquarters` review.

There are also another possibilities that financial circles as well as government figures are included in Mr. Lee`s intensive lobbying because it is written three times in the arraignment about the fact that Mr. Lee appropriated money to pay off the loan amounting to one billion won from S, and H Bank.

The special Investigation Unit is probing Mr. Lee`s case with documents received from Kookmin Bank last weekend.

According to the exclusive source of our newspaper, Mr. Lee had received total 6 billion and 730 million won from Kookmin Bank, Yoido Branch from 5.3~7.9 of 1999. Lee borrowed 22 times totaling 670 million won each ranged from about 180 million~670 million won. Except 670million won for CJ trading company, all other loans were private loans, maximum of 300 million won.

For this loan, Mr. Lee offered stocks and CB of KEP electronic and Daewoo metal (current, Interpion,) as securities.

But it is being pointed out that the security was not proper for the private loan, and the review on the financial health of the company was not thoroughly investigated.

One bank official from loan department said, ``We do not accept stock as primary security because the stock price is very unstable. If the stock price hits bottom for 4 days, the value of the security also plummets to the half of its original price. Stock can be used only as an additional security.`` The official also said, ``the stock of Daewoo and KEP electronic could not be approved as security because they had graded as the level of `limit` and `rejection` during the financial audit.``

Another bank official said, ``It is bankers common sense that the head of branch should confirm situation if the 22 cases of loan have been focused on the stocks or the CB of 2 companies as their security within 2 months from the same branch.``

But the head of the branch of Kookmin Bank, Mr. Koo said, ``I did not know Mr. Lee personally, and the loan was processed through a fair process.``

According to the source of our newspaper, however, it is reported that Mr. Koo called G&G chairman`s office on the 9th of June in 1999 and Mr. Back, who was in charge of loan at that time, also called him on the 21st of May in 1999.

According to the arraignment, Mr. Lee made a priority to pay off the bank loan when he embezzled several billions won of CB from his affiliated companies.

Kookmin Bank said, ``In Yoido branch, we often take stock or bonds as securities because of the provincial character of Yoido, and the 6.7 billion won was repaid back to us. We simply loaned the private stock and CB as market prices and approved the loan. Moreover, we do not know whether the money went to Mr. Lee or not at that time because the private loan do not specify its usage.`` He added, ``We did not care about the fact that the 22 persons worked for the same company.``

Kim Seung-Ryun srkim@donga.com