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Liberal Lawmaker Probed for Stock Fraud Charges

Posted April. 22, 2008 04:05,   


Prosecutors yesterday requested an arrest warrant for lawmaker-elect Chung Kuk-kyo of the liberal United Democratic Party on charges of stock price manipulation.

The Supreme Prosecutors Office said Chung is alleged to have illegally earned a profit of 34 billion won (34 million U.S. dollars) by spreading false information to raise share value.

He denied the charges to prosecutors during questioning, but they say they have circumstantial evidence implicating him.

Prosecutors also said the prospects for signing a memorandum of understanding for a silicon mining project in Uzbekistan were virtually non-existent from the beginning. News of the project had boosted the stock price of H&T, a company in which Chung was a major shareholder.

Prosecutors said other H&T executives sold their shares in the company around the same time Chung did.

In April last year, H&T announced plans to launch the mining project in Uzbekistan, which sent its share price soaring to 90,000 won. Chung then sold 400,000 shares in October last year to earn a sizable profit. The company’s stock, however, plummeted to around 5,000 won after Chung’s selloff nullified the agreement.

Prosecutors also raided over the weekend the house of a former aide to Pro-Park Alliance Party leader Suh Chung-won and the party’s office in Dongjak, southwestern Seoul.

Investigators said they seized evidence that the party took money from Yang Jeong-nye in exchange for giving her the party’s top proportional seat after the general elections.

The office was originally used by Suh to manage the Dongjak district, where he ran before seeking a proportional seat.

A prosecutor said, “Prosecutors found that the [aide] was involved while investigating Yang’s allegations, and they decided to raid his office and house last weekend.”

Lee Han-jeong of the Creative Korea Party, who was also given a proportional seat in the National Assembly, was arrested on charges of academic and resume fraud.

Before entering the Suwon District Court, Lee said, “On my attendance at Yanbian University [in China], I completed a five-year course at an adult learning institution but was not a regular student. I have applied to have restored my master’s degree from the University of Suwon because it was canceled.”

Prosecutors, however, say they confirmed that Lee fabricated his academic records.

Pro-Park Alliance Party lawmaker-elect Kim Il-yun of Gyeongju will undergo questioning today on allegations of giving bribes to election campaigners during the general elections campaign period.

wing@donga.com needjung@donga.com