Prosecutors Finds 800 Billion Won of Illegal Loans

Prosecutors found a total of 21 company owners and employees from six different companies guilty of illegally receiving 1.9615 trillion won worth of loans from public funds window dressing.

In charge of seizing enormous amounts of company funds through fraudulent reporting or illegal loans, the Special Investigation Bureau for public fund irregularities revealed on December 26 that it has arrested and prosecuted nine corporate executive, including Ahn Byeong-gyun, the former chairman of the Nasan Group, Kim Ui-cheol of Newcore, Baek Yeong-gi of Tongkook Corp., and Lee Chang-su of Samik Construction Co., Ltd.

Prosecutors also indicted 12 others, including Lee Sun-guk, the former chairman of Shinho Paper, Heo Jin-seok of Dongsung General Construction Co., Ltd., and confiscated 7.98 billion won of public funds from the six companies.

By deceiving the financial institutions, these six companies received approximately 800 billion won of illegal loans, and financial institutions have to cover up to 1.9615 trillion won of insolvent debt.

Since the establishment of the Special Investigation Bureau in December 2001, the number of public funds-related criminals increased to 169, of which 75 are under arrest, 81 not arrested, 12 wanted and one under investigation, and the public funds redeemed also rose to 77 billion won.

Prosecutors are still conducting their investigations on 10 company owners and employees affiliated with illegal loaning that have allegations of injecting public funds.

Jin-Kyun Kil leon@donga.com