Gyeonggi gov't offices raided in North remittances probe

Politics

Published: 22 Feb. 2023, 15:54

Gyeonggi gov't offices raided in North remittances probe

Prosecutors raid an office of the Gyeonggi Provincial Office in Suwon, Gyeonggi on Wednesday, as part of their investigation into alleged cash remittances to North Korea by the Ssangbangwool (SBW) group. [NEWS1]

Prosecutors raided Gyeonggi Provincial Government offices Wednesday as part of their investigation into alleged cash remittances to North Korea by the Ssangbangwool (SBW) group.

The latest raid is linked to a key figure in the case, Lee Hwa-young, a former Gyeonggi vice governor, who was arrested in September last year on charges of taking bribes from underwear maker SBW Group in return for business favors related to inter-Korean economic projects.

The Suwon District Prosecutors' Office began a search and seizure of the provincial government offices in Suwon and Uijeongbu in Gyeonggi on Wednesday morning to secure related materials to Lee and his aides, according to legal sources.

Wednesday's raids targeted 10 locations, including the offices of the governor and governor's secretary in the main headquarters of the provincial government, the office of the vice governor of economy, which was formerly the office of the vice president of peace, the planning and coordination office and the peace cooperation bureau, as well as Kintex and Lee's residence.

The office of the provincial vice governor's secretary was included in the search as it was the previous location of the peace cooperation bureau.

Prosecutors indicted Lee last October on charges of receiving at least 100 million won ($76,500) in bribes from SBW through a corporate credit card between 2018 and early 2022. Lee served as Gyeonggi's vice governor for peace from 2018 to 2021.

Lee, who heads the Kintex convention and exhibition center, previously served on the SBW's board of directors as an outside member.

Kim Seong-tae, former chairman of SBW, is accused of illegally delivering $8 million to North Korea to promote Gyeonggi's inter-Korean cooperation projects. Kim, who was on the run for eight months, was arrested last month in Thailand on charges of embezzlement, bribery and the illegal transfer of cash to North Korea.

Prosecutors indicted Kim on Feb. 3, and accused Lee of being an accomplice of the former SBW chairman in smuggling foreign currency to the North in violation of the Foreign Exchange Transactions Act.

Under this act, individuals who take more than $10,000 in foreign currency out of the country must report it to customs before leaving.

The former vice governor is suspected of demanding that Kim furtively transfer some $5 million to Pyongyang in 2019 to fund Gyeonggi's smart farm project in the North, an accusation Lee has denied.

Prosecutors have also looked into a potential link to the smart farm cooperation project and Democratic Party (DP) Lee Jae-myung, as he served as Gyeonggi governor from 2018 to 2021. The former vice governor is considered a confidant of the DP chief, who also denied involvement.

Kim allegedly sent $5 million to the North for inter-Korean projects, namely Gyeonggi's smart farm project, and another $3 million to arrange a trip for then-Gyeonggi Gov. Lee to Pyongyang.

Also on Wednesday morning, prosecutors summoned Lee as a suspect on charges of violating the Foreign Exchange Transactions Act and grilled him on the allegations.

This is the second time Lee has been summoned by the prosecution, following questioning on Feb. 15.

Prosecutors allege that SBW provided political funds to former Vice Gov. Lee in return for business favors related to Kintex's hotel construction, solar panel projects and inter-Korean cooperation projects.

Prosecutors accused Lee of helping SBW sign a business agreement with North Korean companies in 2019, under which SBW group was promised business rights to secure rare North Korean minerals.

SBW is also suspected of paying for the meal and other expenses for the Gyeonggi government's joint cooperation project meeting with the North in Shenyang, China in January 2019.

Prosecutors previously conducted raids in September and October last year in connection with the allegations against SBW and Lee.

Former Vice Gov. Lee has denied the allegations against him, claiming he was unaware of remittances by SBW to the North and that there had been "no reason" for the company to transfer money to Pyongyang on behalf of Gyeonggi's provincial government.

BY SARAH KIM [kim.sarah@joongang.co.kr]