IBM probe triggers corruption sweep

IBM probe triggers corruption sweep

Agence France-Presse, Seoul

South Korea's information ministry said on Monday it will conduct a corruption sweep of its own procurement offices after IBM Korea was accused of bribing officials to secure government contracts.

The ministry said it will conduct an unscheduled audit of its affiliated procurement offices for eight days from Wednesday in line with the graft probe of IBM Korea, a subsidiary of U.S. technology giant IBM Corp.

The audit was announced after prosecutors said Sunday that 48 people had been indicted for bribery and other irregularities in the probe involving IBM Korea.

It was the biggest corporate corruption case involving any foreign company or subsidiary doing business in South Korea.

"The ministry will conduct an in-depth audit to prevent the recurrence of corruption," Cho Yong-Min, a ministry spokesman, told AFP after the ministry expressed regret over the graft case involving IBM Korea.

Prosecutors accused officials at IBM Korea and two related firms -- LG IBM and Winsol -- of bribing government officials or colluding with other firms to secure 66 billion won (US$55 million) in government contracts.

LG IBM, a PC firm, is a joint venture between IBM Korea and LG Electronics. Winsol sells IBM computer servers.

Those arrested include IBM Korea's executive director Jang Gyeong-Ho and an unspecified number of government officials.

IBM, which began operations here in 1967, has been one of the most successful multinationals doing business in South Korea. It was named the most widely admired foreign firm here in a survey last year.

IBM Korea employs some 2,500 people with sales of 855 billion won posted in 2001. It has won a series of national honours since it installed South Korea's first computer -- a transistor-based IBM System 1401 -- in 1967.