Elite prosecutor under fire for shady stock deal

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Elite prosecutor under fire for shady stock deal

Opposition lawmakers demanded an investigation into the finances of an elite prosecutor and his wife on Friday after an ethics committee revealed an investment decision that could amount to insider trading.

The controversy began on Thursday when the Public Servants Ethics Committee disclosed the assets of senior government officials. According to the report, the assets held by Yoon Seok-youl, head of the powerful Seoul Central District Prosecutors’ Office, and his wife rose by 2 billion won ($1.9 million) between last year and this year to nearly 6.44 billion won. The disclosure raised questions about where the extra money came from.

In an effort to clear the air, Yoon told the JoongAng Ilbo on Thursday that his wife had planned to invest in an unlisted company at the recommendation of its major shareholder last year. But after he was named head of the Seoul Central District Prosecutors’ Office in May, she dropped the deal because of possible conflict of interest and retrieved the principal investment of 2 billion won. “She signed the stock purchase agreement but never received the shares,” Yoon said. “She was never registered as a stakeholder.”

However, he refused to name the company or the stock price “because it may cause damage,” he said.

The explanation did little to placate the conservative opposition. On Friday, lawmakers from the Liberty Korea Party raised suspicions of insider trading. “Average people cannot buy unlisted stocks,” Rep. Choung Tae-ok said, “and 2 billion won is not an amount you would dare make a deal with because of the possible losses. Yoon’s wife must have had some solid information. It is brazen of Yoon to say that there is no problem because she canceled the deal and retrieved the investment.”

Based on the disclosed assets, Yoon is the sixth wealthiest public official in the Moon Jae-in administration, but most of the assets, about 5.04 billion won, belong to his wife. Yoon’s assets amount to 240 million won.

Yoon was named to his current post, considered one of the most elite in the prosecution, on May 19 last year, just nine days after Moon was elected president. His promotion was seen as a dramatic turn of fortune because he was demoted in 2013 for defying an order from his superior to stand down from an investigation. At the time, Yoon was investigating allegations that the country’s main spy agency, the National Intelligence Service, conducted operations to get then-President Park Geun-hye elected in 2012.

After Park was ousted from office and indicted for corruption and abuse of power last year, Moon handpicked Yoon to oversee the case against her and housecleaning in the Seoul Central District Prosecutors’ Office after a series of bribery scandals.

Opposition lawmakers on Friday pressed Yoon to provide a more detailed explanation of his wife’s investment decision. The Liberty Korea Party threatened to attack the Moon administration for its vetting process if Yoon did not provide a more satisfactory response. “We have to ask if Yoon is fit to head the Seoul Central District Prosecutors’ Office,” Representative Choung said. “The suspicion of Yoon’s wife’s insider trading must be investigated thoroughly.”

Kim Han-kyu, former head of the Seoul Bar Association, also advised Yoon to clarify his wife’s investment plan and relationship with the company. “Trading 2 billion won in the over-the-counter market is unimaginable for average people,” he said.

Choung reminded Moon that his nominee for the Constitutional Court, Lee You-jung, withdrew her nomination last year because of a suspicious stock deal.

In May 2013, Lee purchased 10,000 shares of Natural Endotech when the company was unlisted. She was a lawyer for the company at the time. After it was listed on the Kosdaq in October 2013, she sold her shares in January and August 2014, earning more than 500 million won. In April 2015, the Korea Consumer Agency announced the company had used illegal herbal ingredients in its products, and the stock price plummeted from 91,000 won to 9,270 won per share.

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