S. Korea's GNP admits trying to raise loans
S. Korea's GNP admits trying to raise loans
SEOUL (AFP): South Korea's majority party admitted yesterday to trying to raise massive underground loans, triggering accusations it was seeking to buy votes in the Dec. 18 presidential poll.
A Grand National Party (GNP) spokesman said the party had tried to raise 50 billion won (US$28 million) in kerb loans by mortgaging real estate, but denied the money was to be used for electioneering.
The news came only six days ahead of the polls in which the GNP candidate, Lee Hoi-Chang, is fighting a close battle with opposition's Kim Dae-jung.
"We have been harassed by lenders and construction companies, urging us to pay back our debts before the election. We also need money to pay overdue salaries to our staff," the spokesman told AFP.
The admission came after a kerb loan dealer called a press conference yesterday and claimed a colleague had been approached by GNP officials seeking to raise money.
He presented recordings of conversations between the colleague and GNP officials and copies of promissory notes issued by two mid-sized firms and endorsed by party officials.
Kim Dae-jung's National Congress for New Politics (NCNP) leapt into the fray, charging that the GNP was trying to raise funds to buy votes.
"Lee Hoi-chang has been preaching so-called 'clean politics' but he is plotting to buy votes," an NCNP spokesman said.
"Because of the frozen financial market, business firms are now having serious problems cashing their own promissory notes. But the GNP tried to snatch away already-rare liquidity from the market," he said.
The NCNP and its ally, the United Liberal Democrats (ULD), decided to launch a massive TV, newspaper and publicity campaign to lambast the GNP for violating laws on campaigning and fund raising.
The National Party (NP) of a third presidential candidate, Rhee In-je, went a step further and urged prosecutors to investigate the 55 billion won worth of promissory notes signed by the GNP officials.
The episode erupted as the three rival candidates engaged in a contest over who is better suited for the daunting job of extricating South Korea from the deepening economic chaos which has required an International Monetary Fund (IMF) bailout.
Kim Dae-jung, whose earlier call to renegotiate the IMF bail- out terms were met by harsh criticism from the majority party, softened his position yesterday and sent a message to IMF head Michel Camdessus, promising to respect the Seoul-IMF agreement.
Kim, who is the front runner by a slim margin over the majority party's Lee, also said that once in power, he would ban expensive private tutoring of school children for 18 months and freeze tuition for next year.
South Koreans spend astronomical sums to have children privately tutored from kindergarten through high school to win places in the colleges that will land them the best jobs.
Former general-turned-president Chun Doo-hwan imposed a sweeping ban on private tutoring when he took power in 1980, but the ban was lifted by his successor Roh Tae-woo in late 1980s.