Did Golf Lead to Government Contract?

Grand National Party lawmaker Kim Yang-soo raised suspicions on August 22 that the Sammi Corporation, whose major shareholders had been under harsh criticism for playing golf with former prime minister Lee Hae-chan on March, 1, Korean independence movement day, was likely to have presented false documents to be selected as the gift certificate issuer of the Sea Story video gambling machine.

Lawmaker Kim said in press release, “After analyzing documents from the Korea Game Development & Promotion Institute (KGDI), we found out that Sammi first applied on January 1 to be selected as the certificate issuer but was judged unqualified because its performance of issuing certificates was non-existent. However, the company applied again on February 17 and on March 2, right after its shareholders played golf with the former prime minister on March 1, an actual inspection on Sammi was conducted, and then on March 15, the company received notification that it was qualified.”

Mr. Kim said, “Among about 100 franchise stores the company presented to KGDI, the amount of repayment of 24 franchise stores was same as 90,250 won together with other 29 stores with 99,750 and another 34 stores with 95,000 won. And all the franchise stores presented are either bookstores or stationary stores located in Seoul,” and he added, “These facts raise suspicion that the company falsified performance of its franchise stores for KGDI’s deliberation on certificate issuers.

He also added, “Sammi had had nothing to do with the game industry until last year and all of sudden, the company jumped into the industry. Moreover, just one month after being rejected as unqualified, the company was designated as the certificate issuer. All these situations give rise to suspicion for favor. It is highly likely that there were political pressures in the process of designating Sammi as the certificate issuer.”

According to KGDI, which is in charge of designating gift certificate issuers, Sammi Corp. has issued 408 billion won worth of certificates in just four months from March to July this year.

To this allegation, however, the president of KGDI, Woo Jong-sik, said, ”There has been no pressure related to golf games on March 1. Although KGDI admitted that the actual inspection on Sammi started the very next day after there was a golf game on March 1, it was because of the KGDI’s internal regulation that an actual inspection should be conducted within 15 days after application for deliberation is received.

Lawmaker Kim also pointed out, “After acknowledging that there is loophole in its process because data presented by would-be certificate issuers can be manipulated on computer due to poor regulation on designation of gift certificate issuers, KGDI has strengthened its regulation on May 23. Under the new regulation, probably most current issuer would be regarded as unqualified.”

Mr. Kim said, “Besides Sammi, it is highly likely that other companies also presented falsified data on performance of their franchise stores including the amount of repayment through computer manipulation.”

jkmas@donga.com