President’s backer on the run after bribery probe

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President’s backer on the run after bribery probe

Prosecutors investigating slush funds allegedly used for influence-peddling at Taekwang, Hanwha and C& groups are now targeting a company run by a backer of President Lee Myung-bak.

Investigators at the Seoul Central District Prosecutors’ Office raided the headquarters of Sejoong Namo Tour in Taepyeongno, central Seoul, at 10:20 a.m. yesterday to seek evidence of alleged corrupt practices by its chairman, Chun Shin-il, who is a longtime financial backer of President Lee.

Prosecutors say Chun is suspected of pocketing 4 billion won ($3.5 million) in bribes from Imcheon Industry Co. Investigators are scrutinizing computer hard disks, insider documents and company accounting records seized at the scene. Prosecutors also plan to summon Chun for questioning.

Chun, 67, is currently on an overseas trip, and prosecutors requested the Korea Immigration Service to notify them immediately upon his return. Chun went abroad on Aug. 19 when prosecutors began investigating Imcheon Industry Co. and hasn’t returned since.

On Aug. 6, Chun was sentenced to a three-year prison term, suspended for four years, on charges of using his influence to ease a tax probe on Taekwang Industrial’s chairman, Park Yeon-cha. Park was implicated in a bribery scandal involving the family of former President Roh Moo-hyun.

Prosecutors suspect Imcheon Industry Co., a subcontractor of Daewoo Shipbuilding & Marine Engineering, offered bribes so Chun could help the company get loans from banks and avoid tax investigations.

Lee Su-wu, the head of Imcheon Industry, testified to the prosecution that he offered 4 billion won worth of bribes to get business favors from Chun, prosecution sources said.

According to prosecutors, Imcheon Industry expanded rapidly after 2006. An affiliate of Imcheon merged with another company but struggled with debt and liquidity problems.

The affiliate managed to survive by repaying 13 billion won in loans to a local bank through a debt-for-equity conversion, and Imcheon’s Lee told the prosecution that he asked Chun to lobby the bank to join the debt-for-equity scheme.

Lee also told prosecutors that he offered cash, department store gift certificates and company shares to Chun over the past few years. Lee told prosecutors he even offered 1.2 billion won worth of steel bars last year to Chun, who is currently building a museum at Mount Bukak.

Chun has been serving as an unofficial adviser to Imcheon Industry since 2007, receiving 10 million won per month, the prosecution said.

Lee was indicted in August on charges of embezzling 35.4 billion won of company money for personal use and for running Imcheon’s affiliated companies.

Blue House officials refrained from commenting on Chun’s case. “It’s not appropriate for the Blue House to comment on an investigation related to Chun,” said a senior official. “The Blue House is not even considering briefing the president on the matter.”

Chun and Lee were both in the class of 1961 at Korea University, and they become friends when they participated in a rally on June 3, 1964, against President Park Chung Hee’s decision to normalize diplomatic relations with Japan.

Chun offered his savings as collateral to help Lee borrow 3 billion won after his nomination as the Grand National Party’s presidential candidate in 2007.

By Kim Mi-ju, Lee Chul-jae []
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