Posted October. 25, 2010 11:28,
An investigation began Sunday into whether C& Group lobbied politicians, bureaucrats and banking bigwigs to get business favors after its financial situation deteriorated in the wake of the global shipbuilding slump.
The probe is focused on the flow of funds after the group established C& Heavy Industries in 2006 and acquired Hyosung Metal in 2007. Investigators say the financially strapped conglomerate bribed influential figures in the financial industry.
Whether the group had collusive ties with main creditor bank Woori Bank is also being probed. According to the Financial Supervisory Service, Woori lent 25 billion won (22 million U.S. dollars) to C& Heavy Industries in the first half of 2008 with the affiliates property as collateral.
A high-ranking Woori executive is alleged to have approved the loan despite opposition from the banks employees. Prosecutors are also checking if the groups hiring of the executive`s relative is related to its illegal lending.
A former executive of C& Woobang was summoned for questioning. He is known to have served as a lobbying channel and worked at a large company for more than 30 years before moving to the group in 2006.
He is also reported to have big ties with influential politicians, bureaucrats and corporate figures hailing from the Jeolla provinces.
C& Group Chairman Lim Byung-seok was arrested Saturday on charges of embezzlement of 100 billion won (85 million dollars), creation of slush funds, and accounting fraud.