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[Editorial] Government Agencies Agreed Not to Investigate Hyundai?

[Editorial] Government Agencies Agreed Not to Investigate Hyundai?

Posted October. 09, 2002 22:57,   


People are getting more suspicious about how Hyundai Merchant Marine Co. got to obtain the 490 billion won loan and where the loan was used. Nonetheless, three key executive agencies, Financial Supervisory Service, Fair Trade Commission and National Tax Service, have been flatly refusing to launch a probe into that matter. It seems like the government and its agencies have formed up a consortium, whose purpose is to block any investigation of Hyundai.

Lee Keun-yong, the head of Financial Supervisory Service, citing the Act for Real Name Usage in Financial Transactions, keeps saying that his agency will not begin an investigation of the banking transactions of Hyundai. Fair Trade Commission even refuses to look into the illegal internal transactions between Hyundai Merchant and its affiliates, not to mention tracking of banking records. On top of all these, National Tax Service strongly resists the demand for investigation and alleges that there is not so much hard evidence sustaining a tax evasion charge.

We can’t understand them. Hyundai borrowed a huge amount of a loan from Industrial Bank, while its biggest creditor, Foreign Exchange Bank, did not know anything about it. On the loan application itself, Kim Choong-sik, then president of Hyundai Merchant, did not put his signature. In addition, the record of the loan was not put into the credit-monitoring database (i.e. CRT), which is shared by all the banks in Korea. Industrial Bank indirectly acknowledged illegality of the loan by announcing that it would hold accountable those involved if their mistakes or errors are found out. Nonetheless, Financial Supervisory Service is sitting on its hands. The service is committing a criminal act of negligence of its duty. Its labor union has been arguing that all the suspicions regarding the loan to Hyundai should be investigated by appointing a special prosecutor and tracking the banking records. The union’s assertion itself proves that the service is totally wrong.

The government and Industrial Bank have so far alleged that Hyundai Merchant used the loan as subsidies to its affiliates, and denied that the loan was converted into a secret aid to North. The commission, while investigating and finding out 2,000 violations by chaebols of the internal-transactions regulations, did not even include Hyundai and its affiliates in the investigation. It’s absurd, to say the least. Furthermore, the commission promises that it will not investigate it in the future, either. Wondering for whom and what reason the commission exists. The tax service is busy turning its eyes from the new contention that Hyundai had built up a huge slush finds by laundering money through its overseas corporations.

The government agencies have waged a diehard protection for Hyundai. The impression we got from this reaction is that Kim Dae Jung administration fears what may be brought about by the revelation of the truth. If the three agencies want to deny all the charges of negligence, they should pick up their duties right now.