Kang Kum-won Diverted Company Funds to Buy Real Estate in Yongin from Lee Ki-myung

The central investigation team at the Supreme Public Prosecutors’ Office (Ahn Dae-hee, the chief prosecutor) filed an arrest warrant against Kang Kum-won, the financier for President Roh Moo-hyun and also the chairman of Changsin Textile Co. in Busan, with charges of breach of trust under the Additional Punishment Law on Specific Economic Crimes and tax evasion under the Additional Punishment Law on Specific Crimes, respectively on December 2.

Kang is alleged to have misappropriated five billion won of company funds from 1999 through 2002 and devised deceptive account books. Furthermore, he is suspected to have dodged 1.35 billion won in corporate tax.

In particular, Kang reportedly used a portion of the 1.3 billion won of company funds, which he diverted last year, to buy a forested land of 20,000 pyong in CheongDeok-ri, Guseong-eup, Yongin city in Gyeonggi-do from Lee Ki-myung, the former leader of supporters’ association for President Roh.

With the money, Lee is said to have paid off the debt of Jangsoochun co., the spring water company which President Roh managed at that time, and resolved the provisional attachment on the properties of the president’s brother, Roh Gun-pyeong, including land in Yeorae-ri, Jinyeong-eup, Gimhae city in Kyungnam.

The prosecutors will investigate whether the money with which Kang bought the land in Yongin was merely for investment purposes or as de facto illegal political funds to pay off the debt of Jangsoochun Co. If it is revealed to be political funds, the prosecutors will file an additional criminal charge against Kang.

Furthermore, the prosecutors announced that Kang’s claim of lending 950 million won over four times in November and December last year to Sun Bong-sul, former CEO of Jangsoochun Co. (and subsequently was paid back 930 million won) is not credible.

Regarding this, the prosecutors suspect that Kang and Sun made up false statements cooperatively to conceal the source of a large sum of hundreds of millions of won in Sun’s bank account and are now investigating the source of money. An official of prosecutors’ office added, “Because Kang changes his statements at his convenience and the clues which shows Kang’s manipulation of the evidence were discovered, we will take him into custody and probe into the corruption of the president’s aides.” The prosecutors summoned Sun again as a secretly-investigated person and have been intensively investigating the use of 230 million won of “SK slush funds” which he received from Choi Do-sul, former presidential secretary for general affairs, and the exact source of the money in his bank account. Additionally, the prosecutors were said to have cross-examined Sun and Kang.

Wi-Yong Jung viyonz@donga.com