PR president indicted for fraud in DSME case

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PR president indicted for fraud in DSME case

A publicist who took bribes from the troubled Daewoo Shipbuilding and Marine Engineering and other firms in return for her influence was indicted Monday on charges of fraud and illegal lobbying.

The prosecution’s special investigation team on corruption indicted Park Soo-hwan, president of News Communication, a PR agency that worked for Daewoo, under pretrial detention. The team has been investigating corruption at the shipbuilding company under the management of CEO Nam Sang-tae. Nam was indicted in July on charges of bribery and embezzlement. According to the prosecution, Park received more than 2.1 billion won ($1.89 million) in consulting fees from Daewoo Shipbuilding, one of the country’s three largest shipbuilders, between 2009 and 2011 in return for using her influence with top officials. She was indicted on charges of violating the Attorney-at-Law Act.

Nam was appointed to the post in 2006 under the Roh Moo-hyun administration. In 2009, under the Lee Myung-bak administration, Nam was retained and the prosecutors have investigated if he had done any illegal lobbying to stay in the job.

The prosecution said Park was suspected of using some of the money she received from Daewoo to lobby for Nam’s second term. Min Yoo-sung, then president of the state-run Korea Development Bank, the largest shareholder of the company, was accused of receiving the bribes.

According to the prosecution, Nam promised Park, who bragged about her close tie to Min, a contingent fee if she managed to bring him a second term. After Nam was reappointed to the job in February 2009, Park demanded 2 billion won, and Nam ordered the firm’s public affairs executive to pay the sum, the prosecution said.

The prosecution said Daewoo Shipbuilding signed a 36-month-long PR deal with News Communication at a monthly fee of 40 million won, in addition to a retainer fee of 500 million won. The amount was decided so that Park would be able to receive her promised success fee after paying tax.

In return for the money, News Communication provided Daewoo with nothing more than newspaper clippings.

According to the prosecution, Park also received 1.1 billion won from the cash-strapped Kumho Group in return for her influence over Min. In 2009, the conglomerate faced a liquidity crisis. Its creditors included the Korea Development Bank.

Park did nothing to resolve the liquidity crisis of Kumho, the prosecution said, and it decided to indict her on charges of fraud.

The prosecution said it will further investigate and press charges against Park. Since Aug. 21, five companies, including KB Financial Group and Standard Chartered Bank Korea, are under investigation for similar cases involving Park.

The prosecution also asked a local court to freeze Park’s assets in order to take back the 2.1 billion won that she received from Nam if she is found guilty.

Min will also face an investigation. The prosecution received a written statement from him, but had not questioned him directly.

The Korea Development Bank is also a client of Park’s company. After Min became the president in 2008, the state-run bank signed a PR contract with News Communication. After Min’s tenure ended at the bank in 2011, he continued to work with the PR firm for his private equity fund.

BY SER MYO-JA [ser.myoja@joongang.co.kr]

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