Witnesses Deny Politicians' Role

Lawmakers grilled five key witnesses on Monday to determine whether politicians were involved in an illegal loan and bribery scandal surrounding a venture firm.

The witnesses included Chung Hyun-joon, president of Korea Digital Line, and Lee Kyung-ja of Dongbang Mutual Saving and Finance.

Both Mr. Chung, the venture firm's president, and Mrs. Lee, the financier central to the scandal, denied the involvement of any politicians in the scandal.

Rep. Suh Sang-sup of the main opposition Grand National Party asked Mr. Chung if four administration insiders － who are themselves at the center of a controversy since their names were divulged in a parliamentary session － invested in his funds.

Mr. Chung testified that no politicians invested in the funds, adding that their were four not six funds, as had been reported in the press.

But he did admit that he asked Mrs. Lee to lobby on behalf of his firm and Yuil Semiconductor to the Financial Supervisory Service, the government's financial watchdog.

Mrs. Lee, denied she knew or bribed any politicians. She also denied that Shinyang Factoring, of which she is the real owner, laundered money for political parties.

Mr. Chung is charged with operating the illegal funds and using the money to manipulate stock prices. Further investigation brought about allegations that top government officials and ruling party politicians illegally profited by investing in the funds.

Mr. Chung, his personal assistant, Lee Won-keun, and Chang Sung-whan, president of Yuil Semiconductor initially refused to appear, as did Lee Soo-won, president of Daeshin Mutual Savings and Finance and Mrs. Lee, vice chairperson of Dongbang Mutual Savings and Finance. But they were forced to appear by a formal request issued by the parliament. Under the nation's parliamentary law governing testimony, witnesses who do not appear without an acceptable reason may face a prison term of up to five years.

The five are currently being held at the Seoul Penitentiary on various charges related to the scandal that evolved from illegal loans made by Dongbang and Daeshin Mutual Savings and Finance to Korea Digital Line.

The investigation has revealed that an official with the Financial Supervisory Service took bribes for turning a blind eye to these illegal loans.