Audit: Hyundai Asan Received 140 Billion Won from Inter-Korean Cooperation Fund

It was revealed yesterday that 140 billion won from the Inter-Korean Cooperation Fund of the Ministry of Unification had been remitted to accounts held by Hyundai Asan for the last three years.

It is also possible that former Hyundai Asan vice chairman Kim Yoon-gyu raised a slush fund by falsely allotting the cost of construction in the process of paying this money to North Korea’s Geumgang International Tour Company.

Grand National Party (GNP) lawmaker Lee Han-koo, who belongs to the Finance and Economy Committee of the National Assembly, said in a National Assembly audit of the Ministry of Finance and Economy held at the Gwacheon Government Complex yesterday, “Since 2003, a total of 140 billion won was directly remitted from the Inter-Korean Cooperation Fund to accounts of Hyundai Asan under the pretext of expenses for Gyeongui Road, Donghae Railroad and Road, and materials supply projects for construction of station buildings.”

Rep. Lee added, “The Ministry of Unification’s remark on September 30 in which it said the government did not directly support the Inter-Korean Cooperation Fund to Hyundai Asan turned out to be false,” urging the government to investigate into the allegations of Hyundai Asan’s appropriation of the Inter-Korean Cooperation Fund and mete out punishment to those involved.

In response, a Unification Ministry official said, “Since Hyundai Asan has an exclusive right to businesses related to the North, the Public Procurement Service (PPS) signed a free contract with Hyundai Asan, resulting in the concentration of the Inter-Korean Cooperation Fund to Hyundai Asan,” explaining, “109.9 billion won out of 140 billion won of the Inter-Korean Cooperation Fund has been used properly through the Export-Import Bank of Korea (EIBK) through contracts for materials for railroads and highway construction projects between the PPS and Hyundai Asan.”

During the National Assembly audit of the Ministry of Finance and Economy, GNP Lawmaker Yun Kun-young asked Shin Dong-gyu, the head of the EIBK, who was present at it as a witness, “Supporting the Inter-Korean Cooperation Fund to paving Mt. Geumgang roads for free is to give preference to Hyundai Asan, isn’t it?”

Lawmaker Yun also asked, “If construction costs disbursed from the Inter-Korean Cooperation Fund were falsely charged, resulting in fraud, should the Unification Ministry take responsibility for it, or is this the PPS or the EIBK’s responsibility?”

In response, Shin answered, “Given that the Mt. Geumgang roads are mainly used by South Korean people and companies, we decided to support the project for free,” adding, “In general, this kind of project is supervised by the PPS.”

Joong-Hyun Park Hyung-June Park sanjuck@donga.com lovesong@donga.com