Court didn’t tell of alleged graft when tipped off
Published: 14 Dec. 2009, 21:26
A local court was tipped off to alleged bribery involving former Korea Express CEO Kwak Young-wook and politicians while the company was under receivership six years ago, but failed to inform prosecutors, the JoongAng Ilbo confirmed yesterday.
“In 2003, we received some allegation about corruption by Kwak and irregularities and we had conducted a probe,” an official of the Seoul Central District Court told the newspaper. “After our audit, we found no evidence to back up the allegations, but we did hold him accountable for causing the company troubles and removed him from the CEO post.”
“I have nothing to say if asked why the court had not been aware of Kwak’s creation of slush funds,” he said. “Korea Express, although it was under the court receivership, recorded profits. Under such an unusual circumstance, it wasn’t easy for the court to check on Kwak’s [alleged] embezzlement.”
Kwak, 69, was indicted last month on charges of embezzling 8.3 billion won ($7.2 million) of corporate money from 2001 to 2005 while Korea Express CEO. During the probe, Kwak said he gave bribes to high-profile politicians, including former Prime Minister Han Myeong-sook.
According to sources, the complaints against Kwak were part of the court’s records in the case. While there is a possibility that the complaints include names of those to whom Kwak may have given bribes, the court said it would not release the documents.
“The journalists [reporting on the graft allegations] are not directly involved with the receivership of the company, so they do not have a right to view the records,” said Judge Min Jeong-seok, who handles public affairs for the Seoul Central District Court’s bankruptcy department.
The court, however, should take responsibility for having failed to inform law enforcement authorities, an official of the labor union of Korea Express said. “It’s true that dark rumors spread about Kwak,” he said. “The court should be responsible for its inaction.”
The labor union, however, said it had not known about the complaints.
After its bankruptcy in November 2000, Korea Express fell under court receivership until March of last year. Kwok, who took over as CEO in 1999, kept his post until 2005. The company recorded 1.12 trillion won of sales and 60.9 billion won of profits in 2004, and Kwak was cited by the court for outstanding performance.
In June 2005, Kwak left company after successfully concluding the initial stages of construction of its multimillion-dollar waterway project in Libya and settling $1.3 billion debts it incurred due to delayed construction by its former parent company, Dong Ah Construction Industrial.
Meanwhile, the Seoul Central District Prosecutor’s Office said Han for the second time has rejected its summons for testimony. Han is suspected of having received $50,000 from Kwak in 2007 to help with his career advancement. Sources said prosecutors are trying to decide whether to send Han another subpoena or to seek an arrest warrant.
By Lee Chul-jae, Ser Myo-ja [[email protected]]
“In 2003, we received some allegation about corruption by Kwak and irregularities and we had conducted a probe,” an official of the Seoul Central District Court told the newspaper. “After our audit, we found no evidence to back up the allegations, but we did hold him accountable for causing the company troubles and removed him from the CEO post.”
“I have nothing to say if asked why the court had not been aware of Kwak’s creation of slush funds,” he said. “Korea Express, although it was under the court receivership, recorded profits. Under such an unusual circumstance, it wasn’t easy for the court to check on Kwak’s [alleged] embezzlement.”
Kwak, 69, was indicted last month on charges of embezzling 8.3 billion won ($7.2 million) of corporate money from 2001 to 2005 while Korea Express CEO. During the probe, Kwak said he gave bribes to high-profile politicians, including former Prime Minister Han Myeong-sook.
According to sources, the complaints against Kwak were part of the court’s records in the case. While there is a possibility that the complaints include names of those to whom Kwak may have given bribes, the court said it would not release the documents.
“The journalists [reporting on the graft allegations] are not directly involved with the receivership of the company, so they do not have a right to view the records,” said Judge Min Jeong-seok, who handles public affairs for the Seoul Central District Court’s bankruptcy department.
The court, however, should take responsibility for having failed to inform law enforcement authorities, an official of the labor union of Korea Express said. “It’s true that dark rumors spread about Kwak,” he said. “The court should be responsible for its inaction.”
The labor union, however, said it had not known about the complaints.
After its bankruptcy in November 2000, Korea Express fell under court receivership until March of last year. Kwok, who took over as CEO in 1999, kept his post until 2005. The company recorded 1.12 trillion won of sales and 60.9 billion won of profits in 2004, and Kwak was cited by the court for outstanding performance.
In June 2005, Kwak left company after successfully concluding the initial stages of construction of its multimillion-dollar waterway project in Libya and settling $1.3 billion debts it incurred due to delayed construction by its former parent company, Dong Ah Construction Industrial.
Meanwhile, the Seoul Central District Prosecutor’s Office said Han for the second time has rejected its summons for testimony. Han is suspected of having received $50,000 from Kwak in 2007 to help with his career advancement. Sources said prosecutors are trying to decide whether to send Han another subpoena or to seek an arrest warrant.
By Lee Chul-jae, Ser Myo-ja [[email protected]]
with the Korea JoongAng Daily
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