Former Internet Star Gets 10-Year Sentence

The former president of an Internet start-up was sentenced Wednesday to 10 years in prison and ordered to pay a fine of 1 billion won ($765,000) for his involvement in illegal loans and stock-price manipulation.

The Seoul District Court, in sentencing Chung Hyun-joon, who was head of Korea Digital Line, an Internet and Web solution firm, said he "cost investors some 160 billion won by illegally borrowing funds from two financial service firms where he was the largest shareholder." The two institutions are Dongbang Mutual Savings and Finance in Seoul and Daeshin Mutual Savings and Finance in Inchon.

Korea Digital Line, established in 1998, went bankrupt last year. An Internet start-up, the firm engaged in mergers and acquisitions.

Lee Kyung-ja, vice chairwoman of Dongbang Mutual Savings and Finance and a business partner of Mr. Chung, was sentenced to seven years in prison and fined 50 million won for her role in the case.

"Lee Kyung-ja is also responsible for using trust funds illegally, and during that process bribing government officials, which disrupted the economy and harmed the morality of our financial institutions," the court added.

Political analysts said the loan-for-bribes scandal dealt a blow to President Kim Dae-jung's administration, which had made eradicating corruption its top priority.

by Kim Seung-hyun