Hyunadi Electronics Suspected of Diverting 100 Million Dollars to Support of N.K.

There are suspicions that Hyundai Electronics (Hynix Semiconductor) used 100 million dollars out of the money it earned by selling its semiconductor plant in Britain in May 2000, in a backdoor dealing with North Korea through a bogus company in the Middle East.

At the National Assembly’s inquiry session to the government, Rep. Lee Ju-yeong of the Grand National Party (GNP) made an argument that faced with liquidity crisis, Hyundai Electronics sold its local semiconductor plant in Britain, Hyundai Electronics Scotland (HES), to Motorola for 162 million dollars in May, 2000 but it remitted 100 million dollars out of the money to HAKC, a paper company, which was actually bogus.

Rep. Lee continued, "Though according to the inspection report of Hyundai Electronics, HAKC is a subsidiary of Hyundai Engineering & Construction, it is not recorded as a subsidiary in the inspection report of Hyundai Engineering & Construction. The company was established just before the remittance was made and it just disappeared after that."

As proof Rep. Lee presented the consolidated inspection reports of Hyundai Electronics and Hyundai Engineering & Construction for year 2000 and 2001 concerning the companies’ short-term loans.

Mr. Lee went, "Chung Mong-hun, the then president of Hyundai, ordered the president of the branch office in Britain to send the money without asking for details but he resisted, saying that it was illegal. In the end, President Chung made a female member of the financial staff to make the remittance."

Mr. Lee pointed out the fact that Hyundai Electronics, which was in financial trouble in 2001 with debts of 5.6 trillion won, lent its money to another company didn’t make sense.

He continued, "The money might have gone into the North or been used for Hyundai subsidiaries in an illegal way or been used for political purposes. Government agencies including the prosecution, the Financial Supervisory Commission, the Fair Trade Commission, the National Tax Service and the Board of Audit and Inspection should get to the bottom of the incident."

However, an official with Hynix dismissed his argument saying, "We asked Samil accounting corporation, which made the inspection reports in question, for the incident, but there was no problem in the report and so his argument has proved groundless."

Young-Hae Choi Joong-Hyun Park yhchoi65@donga.com sanjuck@donga.com