South Korean president orders full investigation<\/p>\n
SEOUL (Reuter): South Korean President Kim Young-sam ordered a
\nfull investigation yesterday into charges his predecessor and
\nclose ally Roh Tae-woo operated a huge slush fund.<\/p>\n
The allegations by Roh's former top security aide that he
\nmanaged a 48.5 billion won (US$63 million) fund for his ex-boss
\nsparked panic selling on the Seoul stock market yesterday.<\/p>\n
In the first sign of public anger at the scandal, 300 stone-
\nhurling students fought battles with riot police, who retaliated
\nwith tear gas, in the center of the southwestern city of Kwangju,
\na police spokesman said.<\/p>\n
The students demanded punishment for Roh, widely detested in
\nKwangju for his role in crushing a civilian uprising against
\nmilitary rule there in 1980.<\/p>\n
Kim, now in New York attending United Nations 50th anniversary
\ncelebrations, was quoted by Yonhap news agency as saying everyone
\ninvolved in the case should be investigated \"irrespective of
\ntheir position\".<\/p>\n
Diplomats and political analysts said how Kim handled his
\nbiggest crisis could determine the future of his ruling
\nDemocratic Liberal Party, which faces parliamentary elections in
\nApril next year.<\/p>\n
Kim, the first civilian to be elected president in modern
\ntimes, has staked his political future on rooting out the
\ncorruption he inherited from military-backed regimes.<\/p>\n
\"Payoffs and kickbacks have been an accepted way of doing
\nbusiness in South Korea, at least under military-backed
\ngovernments,\" said one Asian diplomat. \"President Kim Young-sam's
\nanti-corruption drive is once again on the line.\"<\/p>\n
Roh has made no public comment since the scandal broke on
\nThursday last week when an opposition lawmaker accused him of
\ncontrolling 400 billion won ($522 million) of slush money.<\/p>\n
But his office has quoted him as denying any wrongdoing.<\/p>\n
Roh's former aide, Lee Hyun-woo, headed the all-powerful
\nAgency for National Security Planning, Seoul's equivalent of the
\nU.S. Central Intelligence Agency, while Roh was president.<\/p>\n
Banking and construction shares were hit hardest in the stock
\nmarket selloff amid fears an all-out investigation into financial
\nsleaze could embroil the banking industry and uncover evidence of
\nkickbacks among building companies.<\/p>\n
\"News that the former president amassed illicit funds was a
\nbombshell to the market,\" said a Hyundai Securities broker, who
\ndeclined to be named.<\/p>\n
The composite index closed 23.11 points or 2.31 percent lower
\nat 976.39.<\/p>\n
Opposition parties demanded Roh's arrest as fresh allegations
\nof corruption surfaced.<\/p>\n
Shin Ki-ha, floor leader of the main opposition National
\nCongress for New Politics, told reporters he was informed that
\n31.9 billion won ($39 million), possibly political slush funds
\nbelonging to Roh, was deposited in a Seoul branch of the Korea
\nFirst Bank.<\/p>\n
A spokesman for the Korea First Bank branch in northern Seoul
\nsaid: \"We cannot confirm the allegation yet. The only thing we
\ncan say is that the branch is too small to receive such a huge
\ndeposit.\"<\/p>",
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