Ex-Navy chief of staff is indicted

Prosecutors on Tuesday indicted former Navy Chief of Staff Jung Ok-keun over accusations that he took 770 million won ($700,000) in bribes from a local shipbuilding conglomerate when he held the position in 2008.

The 63-year-old was arrested late last month on suspicions that he received kickbacks from two subsidiaries under the now financially crippled STX Corporation through a yachting company, whose majority stakeholder was his 38-year-old son.

Jung’s son was detained a day earlier on charges that he allegedly pocketed money from STX Offshore and Shipbuilding and STX Engine by recording them as sponsors for his yachting event, which was organized in Busan to commemorate the 60th anniversary of the Navy’s establishment.

The Seoul Central District Prosecutors’ Office has since been narrowing its investigation into whether Jung could have benefited from his eldest son’s business dealings.

Jung’s son and his business partner at the time, a former Navy colonel surnamed Yoo, were also indicted on Tuesday for contributing to the bribery, as was a former Navy operations commander surnamed Yoon, who is the non-executive director of STX.

All except Jung were indicted but not detained.

Prosecutors believe the former four-star general pressured the affiliates to pay up through the yacht company, pointing to future contracts with the Navy. The company was established just eight months before the Busan ceremony and shut down not long afterward, leading to suspicions it was a paper company.

Jung reportedly funneled around 80 million won to his son, who was then unemployed, to found and operate the company just a month before Jung’s inauguration as chief of staff.

Investigators added that the 770 million won bribe had been downsized from an initial suggestion of a billion won, when STX held out.

The deal was eventually signed when Jung’s son convinced the conglomerate that he would allow then-Chairman Kang Duk-soo to ride on the same war vessel as former President Lee Myung-bak during the Busan event. Jung is also said to have blackmailed STX in that procedure.

During Jung’s tenure from 2008 to 2010, STX won various contracts for national shipbuilding projects, which add up to at least 80 billion won.

STX filed for court receivership last year after failing to meet payments on its debts. Kang, 64, is currently serving a six-year prison term for business irregularities.

BY LEE SUNG-EUN [selee@joongang.co.kr]