Prosecutors probe Hyosung purchase of U.S. condos
Published: 25 Oct. 2009, 21:17
Prosecutor General Kim Joon-gyu ordered prosecutors investigate a series of real estate purchases made in the United States by the family that heads local conglomerate Hyosung Group after opposition party lawmakers claimed the action may be illegal and could be linked to slush funds. The family of Hyosung Group Chairman Cho Suck-rai and President Lee Myung-bak are linked by marriage, as Cho’s nephew wed President Lee’s youngest daughter in 2001. Cho is also the chairman of the Federation of Korean Industries.
Cho’s eldest son, Cho Hyun-joon, and third son, Cho Hyun-sang, purchased $9.87 million worth of real estate between 2000 and 2008, including luxury condos in San Francisco and Honolulu.
Suspicion over Hyosung’s real estate purchases came to light after Korean-American blogger An Chi-yong posted about local conglomerates’ purchases in the U.S. on the blog “Secret of Korea.”
Opposition lawmakers and civic groups argue if Hyosung’s purchases are revealed to be illegal while prosecutors trace the origin of the sums, they should also reinvestigate the company’s slush fund allegation case. That case was wrapped up on Oct. 1 of this year and resulted in indictments of a few former and interim senior executives at Hyosung. However, a prosecutor who spoke on condition of anonymity said, “This investigation does not mean they are starting to reinvestigate the Hyosung slush fund case, just the real estate purchases that came to light recently.”
A investigation report into the slush fund case, however, reportedly contains information about Hyosung Group moving money out of the country through contracts with its overseas subsidies, such as Hyosung America.
Hyosung Group said the money used for real estate purchases came from the personal assets of Cho’s two sons.
Some observers speculated that the purchase may also be linked to an ongoing investigation into Row Technology.
Row, a local defense contractor located in Gumi, North Gyeongsang, imports parts from Hyosung America. Two of its senior officials were indicted without detention on charges of intentionally selling its products to the Korean army at inflated prices. Row’s head, Ju Gwan-yeop, is a brother-in-law of Cho Suck-rai. Ju left Korea two years ago, a few days after the probe into Row Technology began in 2007.
Opposition Democratic Party Rep. Park Jie-won said a senior official at Hyosung America helped make the purchases.
By Lee Chul-jae, Kim Mi-ju [[email protected]]
Cho’s eldest son, Cho Hyun-joon, and third son, Cho Hyun-sang, purchased $9.87 million worth of real estate between 2000 and 2008, including luxury condos in San Francisco and Honolulu.
Suspicion over Hyosung’s real estate purchases came to light after Korean-American blogger An Chi-yong posted about local conglomerates’ purchases in the U.S. on the blog “Secret of Korea.”
Opposition lawmakers and civic groups argue if Hyosung’s purchases are revealed to be illegal while prosecutors trace the origin of the sums, they should also reinvestigate the company’s slush fund allegation case. That case was wrapped up on Oct. 1 of this year and resulted in indictments of a few former and interim senior executives at Hyosung. However, a prosecutor who spoke on condition of anonymity said, “This investigation does not mean they are starting to reinvestigate the Hyosung slush fund case, just the real estate purchases that came to light recently.”
A investigation report into the slush fund case, however, reportedly contains information about Hyosung Group moving money out of the country through contracts with its overseas subsidies, such as Hyosung America.
Hyosung Group said the money used for real estate purchases came from the personal assets of Cho’s two sons.
Some observers speculated that the purchase may also be linked to an ongoing investigation into Row Technology.
Row, a local defense contractor located in Gumi, North Gyeongsang, imports parts from Hyosung America. Two of its senior officials were indicted without detention on charges of intentionally selling its products to the Korean army at inflated prices. Row’s head, Ju Gwan-yeop, is a brother-in-law of Cho Suck-rai. Ju left Korea two years ago, a few days after the probe into Row Technology began in 2007.
Opposition Democratic Party Rep. Park Jie-won said a senior official at Hyosung America helped make the purchases.
By Lee Chul-jae, Kim Mi-ju [[email protected]]
with the Korea JoongAng Daily
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