Kim plans clean out after loan scandal

Kim plans clean out after loan scandal

SEOUL (AFP): South Korea's President Kim Young-sam met an
influential business chief yesterday, signaling the start of a
clean out of his government tainted by an explosive loans
scandal.

Government officials declined to give details on talks between
the president and Kim Mahn-je, head of Pohang Iron and Steel Co.
(POSCO), who served as a top economic planning official under Kim
Young-sam's predecessors.

But press reports said the POSCO chief had advised the
president over how to bail himself out of the crisis triggered by
a loans-for-kickbacks scandal, which has left confidants arrested
and his second son under a cloud of suspicion.

Kim Mahn-je, one of the planners of the president's election
campaign in 1992, was appointed in 1994 to head the state-run
steel giant.

He is now seen as high on a list of candidates named by
newspapers for key government posts.

The meeting came one day after Prime Minister Lee Soo-sung and
his cabinet offered to step down following the resignations of
ruling party leaders and top presidential aides.

The mass resignations were prompted by a public apology
Tuesday by the president for the controversial behavior of his
son and the arrest of one minister and three ruling party
lawmakers on graft charges.

The apology failed to satisfy opposition parties, which have
accused the son of collaborating with politicians to press banks
to provide loans to Hanbo, the country's 14th largest
conglomerate.

The scandal erupted on Jan. 23 when Hanbo Group subsidiaries
collapsed under US$5.8 billion of debts, and has resulted in the
arrest of 10 prominent figures including Kim's proteges.

Ruling New Korea Party (NKP) officials said a sweeping
reshuffle in the party and government may come next week.