Japan Searches for Chongryon`s Involvement in Financial Scandal

Tokyo Police Agency, investigating the embezzlement scandal surrounding the Chogin Tokyo Credit Union`s, a subsidiary firm of the General Association of Korean Residents in Japan (Chongryon), concentrated its investigation on uncovering the flow of capital and whether or not the Chongryon was involved in the embezzlement and illegal financing on the basis of the books confiscated at the Chongryon Central Headquarter on Nov. 29.

According to the Japanese National Police Agency, former Chongryon financial director Kang Young-Gwan (age 66), who had already put into custody, was found to have applied pressure on the Chongryon`s credit union.

An official at the Chongryon, who was a subordinate of former director Kang, stated to the Police, "Former director Kang called the credit union directly and demanded financing the Chongryon." adding, "He threatened with relegation unless his demand was accepted."

Former Chogin Tokyo Chairman Jung Kyung-Saeng, who was also arrested, said, "What Director Kang demanded was the same as what the Chongryon demanded, and thus anyone who refuses his demand couldn`t survive in Japan."

Former Director Kang is also suspected of having ordered the embezzlement through the accounts of assumed or false names because he was found to have managed by himself the seals and documents necessary for opening an account by a false or assumed name.

The Tokyo Newspaper reported that the Chongryon was financed 4 billion Yen for 3 years from 1994 in such a way. In the process, the money was barely borrowed with security, which resulted in bankruptcy.

Some point out that the local government body is also responsible for the insolvent operations of the Chongryon`s credit union for such a long time because it has neglected its duty to inspect the union. Mainichi Newspaper criticized in its editorial, "It is problematic that the inspection authority has treated (the Chongryon`s financial institutions) as if they were sacred and inviolable."

But the Chongryon released a statement in the name of the Central Standing Committee, in which it denied the charges, arguing, "All activities of the Chongryon were legal, and the business with the Chogin Tokyo was not against the law of Japan."

The Chongryon argued, "The police`s 56 searches in 47 places with the arrest of 15 people and some hundreds of witnesses were unprecedented and nothing but a political suppression full of racial discrimination."

ksshim@donga.com