Taiwan Railroad Fraud Could Embarrass Korean Politicians

The Lianhe Zaobao, a Taiwan newspaper, once reported that Korean politicians fell victim to real estate speculation fraud in Taiwan, causing a ripple effect. On July 1 the newspaper reported that in fact it was Korean gambling businessmen who lost money when they invested a huge amount of money in Taiwan’s high speed rail project on behalf of influential Korean politicians.

The newspaper gave the issue prominent coverage on the first and seventh pages. Six Korean victims who lost money, including a Kim, work in the casino industry and have close ties with Korean politicians. If every detail of the case is revealed, big disruptions in the political circles are expected, according to the newspaper.

It reported that a former professor of Kyungnam University, Kang Myoung-sang, who died in 2003, established a construction company with Lin, a representative of Taiwan’s Democratic Progressive Party (Min Jin Tang). Showing off his personal ties with Taiwan President Chen Shui-bian, he urged some, including Kim, to invest in the Taiwan high speed rail project and received $5 million (about 5 billion won).

However, the company went bankrupt without even making a bid on the project. Investors received nothing and filed a lawsuit in Taiwan court claiming that they were swindled out of their money.

Professor Kang, whose real name was made public, was acquainted with President Chen since he studied in Taiwan and is a well-known expert on Taiwan in Korea.

Hwang Seung-hyun, the deputy representative of the Korean Mission in Taipei said on July 1, “Right after the report, I asked Taiwanese authorities and prosecutors to establish a concrete truth, but there was no official response. There is no confirmed truth yet.”

According to a diplomatic source in Seoul, “The Taiwan Mission in Korea requested Taiwan to confirm the truth several times, and it received the response that the report is overblown to a considerable degree.”

Jae-Young Kim redfoot@donga.com