Lobbyist Took Billions from Carmakers

Prosecutors confirmed yesterday that Kim Jae-rok, the former chairman of Investusglobal who acted as a “money broker” during the Kim Dae-jung and Roh Moo-hyun administrations, received several billion won in slush funds from the Hyundai-Kia Motor Group to lobby politicians.

The central investigation team of the Supreme Public Prosecutor’s Office searched the Hyundai-Kia Motors’ headquarters and Glovis, a Hyundai Motors Group forwarding agent yesterday. Prosecutors are planning to expand their investigation into this case.

Investigation teams, including prosecutors and investigation officials, raided the general planning headquarters of Hyundai-Kia Motors in Yangjae-dong, Seocho-gu, Seoul, and the office of Glovis, located in Wonhyo-ro, Yongsan-gu, Seoul, to search for evidence early yesterday morning.

Documents and computer data recovered by prosecutors are now being scrutinized.

“We searched the offices to capture evidence because there are suspicions that Kim received funds in the several billion won range from Hyundai-Kia Motor Group to lobby politicians,” said Chae Dong-uk, investigation and planning director of Supreme Public Prosecutors’ Office

The prosecution also said that it was confirmed that the slush funds of Hyundai-Kia Motor Group was raised through Glovis, which was reported by someone from the Hyundai-Kia Motor Group.

The prosecution believes that the Hyundai-Kia Motor Group asked Kim to deliver the money to politicians in order to receive preferential treatment regarding its expansion of business into new fields. According to the prosecution’s theories, the funds seem to have been distributed to legislators and high-ranking decision makers of the financial sector.

“We view that there must be backdoor dealings when Kim delivered the illegal funds, and we are investigating who was on his list,” said Chae. “We don’t rule out the possibility that another way of dealing exists that does not entail preferential treatment for loans from financial institutes.”

The prosecution plans to summon employees from Hyundai-Kia Motors and Glovis who are related to the case in order to ask how much they gave Kim and why they gave Kim the funds.

“We won’t expand the investigation to the point where all Hyundai Motor Group personnel are questioned, and this has nothing to do with the recent Hyundai Motor Company acquisition of Kia Motors,” said Chae.

The prosecution assumes that Kim was deeply involved in Hyundai Steel’s advance into furnace industry and the mergers and acquisitions among affiliated companies of Hyundai-Kia Motors.

Furthermore, the prosecution suspects that there may be something unfair behind the rapid growth of Glovis, which was established in 2001 by Chung Mong-koo, chairman of Hyundai-Kia Motor Group, and in which his son Chung Eui-sun is the biggest stockholder.

In fact, the Hyundai-Kia Motor Group’s support for Glovis made it the dominating company in transporting car products, whose listed stocks reached as much as more than two trillion won last year. Because of this, the Prosecution is now examining if there were illegal dealings in the process of succeeding the rights of management of Hyundai-Kia Motor Group.

Meanwhile, the opposition Grand National Party is considering the establishment of a special investigation team on the case of Kim Jae-rok who was arrested on the charge of taking illegal money from companies that asked Kim to lobby high-ranking decision makers of financial institutes for preferential treatment in acquisition of companies and loaning out money. The Kim Jae-rok was known as the big power in financial sector during Kim Dae-jung administration.