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Prosecution to Bring Mr. Jeon into Custody

Posted April. 25, 2005 23:33,   


The prosecution’s hint at the possibility of bringing Jeon Dae-wol, the president of Highend, a core player in the Russian oil field investment scandal of Korail (Korea Railroad Corporation), under custody soon has left many anticipating for further developments in the case.

On April 25, an official from the prosecution said, “We are expecting noticeable results today or by tomorrow with some coercive and persuasive measures being done on Mr. Jeon.”

The Third Special Investigation Department of the Seoul District Prosecutor’s Office, headed by Mr. Hong Man-pyo, will summon and investigate four former and current officers at Korail involved in this case this week. The prosecution is currently tracing hundreds of bank accounts held by 35 people involved in the case including Mr. Hur Moon-suk, who is currently in Indonesia and is refusing to return to the country voluntarily.

The prosecution officer said, “We have developed a blueprint for this investigation last week through interviews with witnesses regarding the working-level individuals.”

The prosecution is planning to investigate the involved people at Korail to uncover the reasons for participating in this oil field business despite the negative outlook from the report by the Schlumberger Limited (a world-class oil business consultant) that warned about the “high risk and low profitability” at the beginning of the project.

The prosecution is focusing on Korail’s assertion about the validity of the business in particular, which was made on the report documents submitted to the National Assembly on April 20.

Regarding the indication by the Board of Audit and Inspection about the “lack of validity,” the railroad corporation said, “Petrosakh (the company that was to be acquired by the corporation) was sold to a Russian company backed by BP, the largest oil company in Great Britain,” and asserted that this “indirectly proves that the project did not lack business potential.”

However, such an assertion by the railroad corporation has a considerable discrepancy with the conclusions of the Board of Audit and Inspection and the prosecution made through the investigation into related organizations and relevant members of the industry. The prosecution has reportedly concluded that the Sakhalin oil field development project had no economic validity after the investigation was performed on witnesses last week.