Unfair Aid of 37 Billion Won for Venture Company

The special precinct 2 of Seoul district public prosecutors office stated on the 17th that they filed a suit against Mr.Lee Gun-Joo (40), who was advisor for the fund investigation.

He is suspected of receiving 140 million won as reward from S venture company, which is manufacturer of LCD and received 37 billion won for investment from Han river Restructuring Fund, in which the Korea Industry Bank (KIB) has major stockholdings.

The prosecutors office (PO) announced that Mr. Lee received the money through Mr. Lee Suk-Gon (35, under arrest), C.E.O. of KMS management institute that provided consultation services to S company.

HRF was established for the purpose of making investments in minor enterprises by 22 financial agencies besides KIB in September 1998 and they invested 333 billion and 300 million won.

It is operating under a trust contract that Scudder, foreign fund company, contracted with KIB. Currently, KIB is the chief stockholder that possesses 23 percent of the fund and foreign investors own 18.8 percent.

Scudder explained, "Mr.Lee has nothing to do with Scudder and we are managing fund transparently, as we indicted S company official on the suspicion of usurpation."

PO ordered a search for 2 identified criminals such as Mr. Kim Kyu-Hyun (38), ex-director of information and communication department in National Intelligence Service, on suspicion that he received shares worth 700 million won of S company by helping manage the funds for S company.

On the other hand, PO restrained Mr. Gu Ja-Poong (53), chief director of Korea Display Research Corporation, as he is suspected of receiving shares worth 100 million won along with request from Mr. Lee (45), professor at Seoul National University and the chief stockholder in S company to be selected in foreign forum.

Also, PO arrested Mr. Kim Jung-Ho (47), ex-director of Science and Technology Ministry, and Mr. Yeo Un-Suk (44), ex-director of Patents Administration, as they are suspected of receiving 270 shares of S company and 25 million won with request from Professor Lee to provide advantage in patent.

PO pressed charges against Mr. Kim Won-Dae (42), ex-chairman of S company, as he is suspected that he usurped 820 million won of company’s capital under the disguise of buying patent rights regarding technology of LCD which professor Lee developed.

However, professor Lee`s side protested, saying, "We bargained for patent rights and followed fair procedures, distributing shares for thanksgiving without expecting any returns."

PO will expand the investigation on comprehensive fund management according to information that there were many compromises in the investment, which reached 2 trillion won including this fund in the process of four Restructuring Funds (Hanriver, Arirang, Mugunghwa, Seoul)

Myoung-Gun Lee gun43@donga.com