Hyundai Money-Laundering Probe Expands

Prosecutors are investigating the possibility that the Hyundai Automotive Group might have utilized its overseas corporations to launder money owned by Kia Motors President Chung Eui-sun.

The Supreme Public Prosecutors’ Office questioned presidents of five investment companies, including Win & Win 21, who were arrested on April 4 on charges of managing and increasing Chung’s slush fund in collusion with the Hyundai Automotive Group about source of the money that flowed into the funds.

The prosecutors’ office believes that the group sent slush funds to its affiliates overseas to launder the money or transfer official funds to affiliates of the group’s overseas corporations under an investment cover, but then moved the money back into domestic circulation in a multi-stage process.

The prosecution is also looking into the possibility that the group’s overseas corporations might have generated slush funds by writing off investments received from the group’s affiliates or through liquidation of the companies themselves after receiving the investment money.

It thinks that the group laundered the money through paper companies in tax havens in Southeast Asia and moved the money back into domestic circulation.

Meanwhile, it also said that it would conduct the investigation quickly.

Chae Dong-wook, who is responsible for planning investigations at the Supreme Public Prosecutors’ Office, said, “As the prosecution found a new clue from the seizure and search of Hyundai Automotive Group, we are actually conducting the investigation in full swing,” adding, “We’ll focus on undertaking the probe into the hot issue quickly.”

Regarding comeback of Chung Mong-koo, chairman of the group, Chae said, “The longer an investigation into large conglomerates continues, more charges emerge. I believe that Chung will come back to Korea at the promised time, after wrapping up his schedule overseas.”

The prosecutors’ office called in an official at the Ministry of Construction and Transportation yesterday to clarify the suspicion over lobbying about authorization of expanding the research center of Hyundai Automotive Group in Yangjae-dong, Seoul.

It also called in and questioned Shin that day, the 47-year-old president of Investus Global, formally led by Kim Jae-rok, a 46-year-old financial broker who was recently arrested.

Tae-Hoon Lee jefflee@donga.com needjung@donga.com