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Former President Roh Tae-woo’s Nephew Arrested on Embezzlement Charge

Former President Roh Tae-woo’s Nephew Arrested on Embezzlement Charge

Posted November. 07, 2007 07:24,   


The Seoul Public Prosecutors’ Office reportedly arrested former President Roh Tae-woo’s nephew yesterday on an aggravated embezzlement charge.

The son of ex-President Roh’s brother, Roh Ho-jun, is suspected of having embezzled tens of billions of won. When his frozen food company sold its land lot to its subsidiary at a price much lower than the market price, Roh put a lien on the lot and took out a multi-billion won loan to settle the deal.

Park, who led the frozen food company prior to Roh, filed a criminal claim in June with the DA’s office, alleging that Roh did not obtain the approval of the board of directors prior to the land deal.

The prosecution gathered crucial information and evidence supporting the allegation when searching the company and questioning its officers earlier last month.

Roh, who now runs the frozen company as CEO, owns 70% of its shares, while his father owns the remaining 30%.

The prosecution has commenced legal procedures to confiscate 30% of the shares of Roh Jae-woo, or brother of former President Roh, since the shares are believed to constitute part of former President Roh’s slush fund, and thus are subject to forfeiture.

Previously, in 1997, the South Korean Supreme Court ruled that Roh Jae-woo had purchased the shares with the money that was financed by former President Roh’s slush fund. Thus, according to the ruling, Roh Jae-woo has to pay back an accrued amount of 12.9 billion won as principal and interest payments to former President Roh.

Since the shares are not traded on the market, ex-President Roh recently filed a petition with the prosecution to pay back his fines not with the shares, but with cash instead.

Former Ssangyong Chairman Kim Seok-won managed a fund of 20 billion won, and Roh Jae-woo managed a fund of 30 billion won (including accrued interest) on behalf of former President Roh. When ex-President Roh turns them over to the authorities, his fines will be almost paid off.

Former President Roh was about to see his mansion in Seoul put up for auction due to his outstanding 50 billion won in fines. Thus, he had to file a petition against his brother to keep his house.

needjung@donga.com dnsp@donga.com