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Prosecutors to Punish State-run Organizations for Corruption

Prosecutors to Punish State-run Organizations for Corruption

Posted May. 13, 2008 08:30,   


The head of a welfare facility who used the government’s subsidy for the physically challenged to pay for plastic surgeries and personal residence

A businessman who embezzled the government’s funding for technology development to finance his daughter’s overseas language study

These people were recently indicted by the prosecution on charges of embezzlement of state money by public firms and other state-sponsored organizations.

The Supreme Prosecutors’ Office announced yesterday that it would intensify its investigation on malpractices by state-run companies that drain money from the government’s coffer as well as other corruption cases linked with state funds.

Senior prosecutor Choi Jae-gyeong said, “Recently, the functions and budgets of state-run corporations have been expanded to a level comparable to those of administrative agencies. However, they have not been subject to investigation over their corrupt conduct. We’ll closely cooperate with other government agencies including the Board of Audit and Inspection and the Financial Supervisory Service to investigate until tangible results are drawn.”

Prosecutors are investigating or secretly examining around 20 state-run firms and organizations including the Korea Coal Corporation, the Korea Exchange, and the Korea Securities Depository.

Regarding irregularities in state-run firms, the focus of the probe is on △bribe-taking △illegal activities in personnel management and misappropriation △creation of slush fund and embezzlement △accounting fraud, tax evasion, bid-rigging and illegal subcontracting, and △illegal brokering.

In terms of illegal spending of state subsidies, the investigation has been focused on △defrauding and embezzling subsidies △government officials’ bribe-taking and connivance at defrauding subsidies △forging documents, and △malfeasance in office.

Prosecutors announced that they have investigated around 80 people and arrested 34, while dealing with 31 crime cases related with state subsidies since they began investigation in January. They have found that subsidies worth 20 billion won have been lost, and took punitive measures to set off the loss.

The prosecution said that it would continue to collect information on illegal activities and send the information to regional prosecutors’ offices including the Seoul District Public Prosecutors’ Office so as to facilitate investigation.

The prosecutors’ office plans to choose some state-run firms as the first targets of investigation. The Central Investigation Department of the Supreme Prosecutor`s Office will probe some firms that have been seriously checkered with corruption cases.

Also, a prosecutorial team specializing in confiscating illegally amassed wealth is expected to gain new momentum as the prosecution has recently charged Jeong Guk-gyo, a United Democratic Party’s lawmaker-elect who was involved in stock price manipulation, some 50 billion won.