Prosecutors link Roh aides to sale of Sejong

Park Yeon-cha, chairman of Taekwang Industrial and supporter of former President Roh Moo-hyun, partly acknowledged trading Sejong Securities shares under different names around the time it was acquired by Nonghyup, the National Agricultural Cooperative Federation, in January 2006.

What started as an investigation into lobbying to acquire Sejong at a low price is developing into a case involving several once-close aides to former President Roh. As the case involves 8 billion won ($5.3 million), it could become the biggest financial scandal committed during the Roh administration.

“A brokerage house in Gimhae recommended NH Investment and Securities so I invested,” Park, 62, said in an interview with the JoongAng Ilbo. NH Investment and Securities is Sejong Securities’ new name. “I recently realized that my employees traded 30 percent of Sejong shares they bought on my behalf under different names to reduce taxes. I will take responsibility for tax evasion.”

The Supreme Public Prosecutors’ Office, which is investigating allegations surrounding the sale of Sejong Securities, intends to summon Park soon. Prosecutors believe that Park used insider information and bought 10 billion won worth of Sejong shares and sold them for double the price he paid.

Park denied using insider information. “The allegation that I used insider information is not true,” he said. “I’ll explain it to prosecutors.”

Park was fined 30 million won in September 2004 for offering 700 million won in illegal funds to An Hee-jung, an aide close to Roh, around the time of the presidential election in 2002. The site where Roh now lives in Bongha Village, Gimhae, South Gyeongsang, was provided by a Park aide.

Prosecutors are expected to first charge Park for tax evasion and move on to other allegations. They were handed the results of a tax investigation on Park by the National Tax Service, and are now looking at whether he created illegal slush funds.

Prosecutors also applied for an arrest warrant for Jeong Hwa-sam, 62, former chief executive officer of Zephyros Golf Club, and his brother Jeong Gwang-yong, 54, on charges of receiving bribes connected to the sale of Sejong Securities. Jeong is a graduate of Busan Commercial High School, the same school former President Roh attended. Jeong is known to be very close to Roh.

The Jeong brothers allegedly received 3 billion won from Hong Ki-ok, 59, CEO of Sejong Capital in 2006 when Sejong was sold to Nonghyup. Hong was a major shareholder of Sejong Securities at the time of sale.

Hong was arrested on Saturday for giving 5 billion won in bribes to Chung Dae-kun, chairman of Nonghyup, in January and February 2006 in a bid for Chung’s help with the sale of Sejong Securities.

Prosecutors are investigating whether some of the 5 billion won flowed into the hands of government officials who held positions during the Roh administration.

By Cho Kang-su, Kim Seung-hyun JoongAng Ilbo [jbiz91@joongang.co.kr]