Mirae head accused of favor for president’s aide

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Mirae head accused of favor for president’s aide

The central investigation team of the Supreme Prosecutors’ Office says it has evidence that Mirae Savings Bank Chairman Kim Chan-kyong granted an unfair favor requested by an administrative officer at the Blue House to help his older brother recover management rights of a hospital.

Kim was arrested and charged with alleged embezzlement and breach of trust early this month after prosecutors launched their third round of investigations into financial irregularities at four suspended savings banks including Mirae.

It is the first evidence the central investigation team has obtained of a savings bank executive lobbying a government official after four banks were suspended by the Financial Services Commission May 6.

According to prosecutors, an unnamed official from the Mirae Savings Bank stated, “In late 2010, [Chairman Kim] acquired a hospital in Yongin, Gyeonggi, which was in court receivership [because of poor financial management] and returned it to the hospital owner surnamed Kim.”

The official also told prosecutors, “Chairman Kim acquired the ailing hospital at the request of the Blue House official, who was the younger brother of the hospital owner.”

The Blue House official, surnamed Kim, previously worked for the Seoul Metropolitan Government and is currently in charge of general affairs at the Blue House, according to sources at the prosecution.

Sources say the hospital owner applied for court receivership to write off some 16 billion won ($13.7 million) worth of debt and then lost control of management rights. He then allegedly asked his younger brother at the Blue House for help.

According to the witness from Mirae Savings Bank, Chairman Kim established a special purpose company (SPC) in November 2010 to which he extended an illegal loan. With the money, the SPC bought bonds in the hospital from the stated-owned Nonghyup agricultural cooperative. The company became the largest bond holder and then requested the court to wrap up the bankruptcy.

Chairman Kim then allegedly returned the hospital to the original owner, the older brother of the Blue House official, after receiving around 6 billion won.

By Park Jin-seok [angie@joongang.co.kr]
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