Kim's son takes huge commission: Television report

Kim's son takes huge commission: Television report

SEOUL (AFP): A son of South Korean President Kim Young-Sam
took a 200 billion won (US$226 million) commission from a German
firm through an intermediary for machinery imports, a television
report alleged yesterday.

Yonhap Television News (YTN) quoted prosecutors as saying the
equipment was imported by the now-failed Hanbo business Group
from the German firm in 1994.

An official in the Prosecutor General's office told AFP that
the YTN report was based on a search and seizure warrant taken
out by the prosecution to probe the bank accounts of the alleged
intermediary, Park Tae-Chung.

"The rumors that the son received the $226 million in
commission were mentioned in the warrant ... but that does not
necessarily mean that Kim Hyun-Chul received the money," the
official said.

Park Tae-Chung is being questioned by prosecutors probing
high-level corruption in connection with the Hanbo Group's
collapse in January.

Park Tae-Chung acted as a proxy for Hanbo and signed a
contract with the German company -- identified only by the
initials "SMS" in the office of Hanbo, YTN said.

He received the money between July and December 1994 and
conveyed it to the son, YTN said.

YTN alleged the contract for the steel plant equipment
inflated the price by some 50 percent. The extra money was
diverted and channeled to Kim Hyun-Chul, it alleged.

Hanbo, the 14th largest of South Korea's family-owned
conglomerates, failed under the weight of $5.7 billion of debts
in January, triggering an expose of high-level corruption.

Four politicians, a former minister and three former banking
heads were thrown into jail and are now on trial for pressuring
banks to extend massive loans with insufficient collateral to
Hanbo.

The group's patriarch Chung Tae-Soo and a Hanbo executive were
also imprisoned on fraud and bribery charges.

Kim Hyun-Chul, 38, who holds no official position, has been at
the center of a public uproar over his alleged involvement in the
Hanbo case, as well as influence peddling and intervention in
government personnel selection.

He has been incommunicado since he issued a public apology for
causing concern to the people and his father but indirectly
denied being guilty of any wrongdoing.

The opposition has accused the prosecution of a coverup on
Hyun Chul's alleged role in Hanbo and summoned him to appear
before a separate parliamentary probe next month.

The Prosecutor General's Office unceremoniously replaced the
head of the Hanbo investigation team Friday in line with a
directive from Prime Minister Koh Kun to reinvestigate the case.

This week the South Korean banking sector was dealt another
blow when Sammi business group, the country's 26th largest
conglomerate, buckled Wednesday under debts of $2.2 billion.

Speaking on state-run KBS radio, the country's top economic
planner, Finance and Economy Minister Kang Kyong-Shik, said the
government would push for radical reforms of the country's
obsolete financial sector.

The reforms will be as radical as the British financial "Big
Bang" in the mid-1980s, he said, to try to avert further business
collapses.

The failure of Sammi sent a chill through already hard-pressed
financial market, driving interest rates up and sending shares to
a new low.

The average yield of three-year corporate bonds reached 14.61
percent Friday, up 0.2 percent from the previous day. Share
prices slid 2.4 percent.