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Today SK Corp. Chairman Choi Tae-won Asked to Appear at Prosecution

Today SK Corp. Chairman Choi Tae-won Asked to Appear at Prosecution

Posted February. 20, 2003 23:13,   


The Seoul District Prosecutor`s Office (SDPO) on Feb. 20 said that it asked SK Corp. Choi Tae-won to appear at the prosecution for an inquiry at 10:00 on Feb. 21 over allegations of illegal insider trading.

An official with the SDPO said, "We asked his attorney for his appearance over the phone. Mr. Choi is expected to appear at the prosecution as a suspect."

According to the prosecution, last March he sold his 3.25 million Sheraton Walkerhill Grande Hotel shares to SK C & C, SK Group`s affiliate, at an inflated price and got its stake in SK Corp. at a dirt-cheap price, thereby causing a loss of tens of billions of won to SK C & C.

In addition, SK Securities is alleged to have concealed a deal under which it agreed to repurchase shares of SK Securities from JP Morgan. And Mr. Choi is accused of passing the loss of some 100 billion won that occurred from the concealed deal on to SK Global.

The prosecution plans to request an arrest warrant on charges of breach of trust on Feb. 22, if possible, after it conducts a thorough investigation in his involvement in illegal donation through insider trading and the concealed deal of SK Securities.

However, prosecutors say that they do not have any plan to call SK Group chairman Son Kil-seung, chairman of the Federation of Korean Industries, and his cousin, SK Global vice president Choi Chang-won, at present. The prosecution judges the fact that last March Choi Tae-won sold his 600,000 Walkerhill hotel shares to SK Global at a price of 40,000 won per share, thereby causing a loss of 26 billion won to SK Global also constitutes neglect of duty and now is conducting investigation. For the investigation, it confiscated and is analyzing inside documents in which SK Group applied five different standards to Walkerhill hotel shares in assessment. An official with the prosecution said, "The documents are evidence that SK appreciated Sheraton Walkerhill Hotel shares on purpose." On Feb. 20 the SDPO called Kim Ji-gyun, former SK Securities president, and four to five SK Group officials for an inquiry. It plans to prosecute Choi Tae-won and three to four more SK Group executives on charges of illegal insider trading and concealment of deal.

Sang-Rok Lee Tae-Hoon Lee myzodan@donga.com jefflee@donga.com