Warrant sought for LIG owner’s son

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Warrant sought for LIG owner’s son

Prosecutors yesterday sought the arrest of the first son of LIG Group Chairman Koo Cha-won and one former and one current top executive of the group’s affiliates in connection with allegations that the group’s owner family fraudulently issued commercial papers worth multiple billions of won last year.

Koo Bon-sang, the son and vice chairman of LIG Nex1, a defense arm of the group; Oh Chun-seok, the president and CEO of LIG Corporation; and Jeong Jong-oh, the former chief management official at LIG Engineering & Construction, are accused of fraud charges, the prosecutors said.

The prosecution in August last year launched a probe into allegations that the large conglomerate issued some 24.2 billion won ($21.6 million) of commercial papers between late February and early March in 2011 under the name of the construction company that was on the verge of coming under court receivership.

The construction firm filed for receivership later that month after suffering financial difficulties caused by the recession in the local construction business and growing project financing loans.

The group is also suspected of submitting fabricated data to financial institutions to hide such facts and issue the bills, according to prosecutors.

Earlier last month, prosecutors raided the offices of LIG Group and its affiliates to confiscate accounting books, computer hard disks and other relevant materials that would support the allegations.

The investigators said they suspect the Koo family masterminded the issuance of the notes prior to filing for receivership aimed at retrieving stocks mortgaged by the group’s shareholders, adding they will look into who led the fraudulent scheme and whether the group illegally exploited its affiliates’ fund to help the ailing construction firm.

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