Kim's son takes huge commission: Television report<\/p>\n
SEOUL (AFP): A son of South Korean President Kim Young-Sam
\ntook a 200 billion won (US$226 million) commission from a German
\nfirm through an intermediary for machinery imports, a television
\nreport alleged yesterday.<\/p>\n
Yonhap Television News (YTN) quoted prosecutors as saying the
\nequipment was imported by the now-failed Hanbo business Group
\nfrom the German firm in 1994.<\/p>\n
An official in the Prosecutor General's office told AFP that
\nthe YTN report was based on a search and seizure warrant taken
\nout by the prosecution to probe the bank accounts of the alleged
\nintermediary, Park Tae-Chung.<\/p>\n
"The rumors that the son received the $226 million in
\ncommission were mentioned in the warrant ... but that does not
\nnecessarily mean that Kim Hyun-Chul received the money," the
\nofficial said.<\/p>\n
Park Tae-Chung is being questioned by prosecutors probing
\nhigh-level corruption in connection with the Hanbo Group's
\ncollapse in January.<\/p>\n
Park Tae-Chung acted as a proxy for Hanbo and signed a
\ncontract with the German company -- identified only by the
\ninitials "SMS" in the office of Hanbo, YTN said.<\/p>\n
He received the money between July and December 1994 and
\nconveyed it to the son, YTN said.<\/p>\n
YTN alleged the contract for the steel plant equipment
\ninflated the price by some 50 percent. The extra money was
\ndiverted and channeled to Kim Hyun-Chul, it alleged.<\/p>\n
Hanbo, the 14th largest of South Korea's family-owned
\nconglomerates, failed under the weight of $5.7 billion of debts
\nin January, triggering an expose of high-level corruption.<\/p>\n
Four politicians, a former minister and three former banking
\nheads were thrown into jail and are now on trial for pressuring
\nbanks to extend massive loans with insufficient collateral to
\nHanbo.<\/p>\n
The group's patriarch Chung Tae-Soo and a Hanbo executive were
\nalso imprisoned on fraud and bribery charges.<\/p>\n
Kim Hyun-Chul, 38, who holds no official position, has been at
\nthe center of a public uproar over his alleged involvement in the
\nHanbo case, as well as influence peddling and intervention in
\ngovernment personnel selection.<\/p>\n
He has been incommunicado since he issued a public apology for
\ncausing concern to the people and his father but indirectly
\ndenied being guilty of any wrongdoing.<\/p>\n
The opposition has accused the prosecution of a coverup on
\nHyun Chul's alleged role in Hanbo and summoned him to appear
\nbefore a separate parliamentary probe next month.<\/p>\n
The Prosecutor General's Office unceremoniously replaced the
\nhead of the Hanbo investigation team Friday in line with a
\ndirective from Prime Minister Koh Kun to reinvestigate the case.<\/p>\n
This week the South Korean banking sector was dealt another
\nblow when Sammi business group, the country's 26th largest
\nconglomerate, buckled Wednesday under debts of $2.2 billion.<\/p>\n
Speaking on state-run KBS radio, the country's top economic
\nplanner, Finance and Economy Minister Kang Kyong-Shik, said the
\ngovernment would push for radical reforms of the country's
\nobsolete financial sector.<\/p>\n
The reforms will be as radical as the British financial "Big
\nBang" in the mid-1980s, he said, to try to avert further business
\ncollapses.<\/p>\n
The failure of Sammi sent a chill through already hard-pressed
\nfinancial market, driving interest rates up and sending shares to
\na new low.<\/p>\n
The average yield of three-year corporate bonds reached 14.61
\npercent Friday, up 0.2 percent from the previous day. Share
\nprices slid 2.4 percent.<\/p>",
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