Court issues detention warrant for Cho’s relative

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Court issues detention warrant for Cho’s relative

Justice Minister Cho Kuk’s relative claimed that a company at the core of suspicious investments made by Cho’s family was actually funded by the minister’s wife from the very beginning, putting her in the cross hairs of prosecutors investigating a litany of allegations against the president’s trusted aide.

That relative, Cho’s first cousin once removed, who’s only been identified as a 36-year-old man also surnamed Cho, relayed the statement on Monday during a court hearing to review his pre-trial detention warrant. The court issued the warrant on Monday night, and with that, the relative became the first person in the ongoing Cho probe to receive a pre-trial detention warrant.

The Seoul Central District Court ruled there was a need to detain Cho’s relative because he could flee or destroy evidence. Prosecutors had filed the warrant earlier that day on charges of violating the country’s Financial Investment Services and Capital Markets Act and the Act on the Aggravated Punishment, etc. of Specific Economic Crimes. Prosecutors also accused him of instigating evidence destruction.

It was only last Saturday that the relative returned to Korea via Incheon International Airport after he fled to the Philippines last month when Cho’s scandal arose. Prosecutors had been waiting to arrest him, believing he was the mastermind behind hefty investments made by Cho’s wife and two children. But his testimony in court on Monday suggests Cho’s wife might have played a bigger role than initially thought.

Prosecutors believe Cho’s relative is the actual owner of a company named Co-Link Private Equity (PE). Cho’s family invested 1.05 billion won ($882,000) in a private equity fund managed by PE called Blue Core Value-Up 1, including 950 million won invested in the name of Cho’s wife and 50 million won invested in the names of each his son and daughter.

Blue Core Value-Up 1’s total capital was 1.4 billion won, including investments from Cho’s brother-in-law and two nephews, which is why prosecutors see the private equity fund as basically being owned by the Cho family.

In mid-2017, Blue Core Value-Up 1 invested 1.38 billion won in a tiny company called Wellscnt, which produces street lamp control systems, becoming the largest shareholder. Soon after, Wellscnt’s performance started to take off as it landed deals with numerous local government offices and public companies.

Prosecutors are trying to figure out whether Cho, who worked as the presidential senior secretary for civil affairs from May 2017 to July 2019, pulled strings to help Wellscnt win contracts to the benefit of his family.

Cho has asserted through numerous accounts that he knew nothing about the investments and that his wife was taking advice from his first cousin once removed, who’s an “investment expert in the family.”

According to legal sources, Cho’s relative told the court on Monday that Cho’s wife funded the establishment of PE. In a bid to distance the minister’s wife’s alleged investments from the Blue House, Cho’s side was said to have explained to prosecutors that Cho was a professor at Seoul National University in February 2016 when PE was founded, before he took up his role as President Moon Jae-in’s senior secretary for civil affairs in May 2017.

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