Shindongah Owner Found Paying W3.52 bill. for Lobbying

    November 30, 1999 07:30

    Choi Soon-young, chairman of the Shindongah Group was found to have
    spent a total of W3.52 billion for entertainment and confidential uses
    from April last year until just before his arrest in February this year.
    Choi was suspected of carrying out an intensive lobbying campaign aimed
    at top government officials last year in an attempt to avoid arrest.
    Choi’s entertainment and confidential uses fund was provided by Korea
    Life Insurance, for which he used to be the largest shareholder.
    Prosecuters began their investigation of Choi after allegations of
    capital flight, beginning from April last year. In addition, Choi
    submitted reciepts for an additional W1.8 billion spent for personal
    uses. Choi is known to have raised a total of W100 billion in off-shore
    funds in August 1997 but the wherabouts of the money is still a mystery.
    According to the Financial Supervisory Service and Korea Life Insurance
    on Monday the total W3.52 billion expenses attributed to Choi amount to
    a monthly spending habit of W250 million for entertainment and W98
    million for confidential uses over the 10 month period.

    Choi established a ‘GM’ fund in the Cayman Islands in August 1997 with
    a capital value of US$100 million, and spent US$80 million to purchase
    unsecured corporate bonds for four ghost firms. One official of the FSC
    explained that of the total US$80 million, US$69 million was brought
    into the country via four to five foreign banks including a Swiss Bank
    and the New York branch of Morgan Stanley. The FSC said the money was
    brought in between August and November 1997. Officials said they have
    been investigating the issuance of W1 trillion in loans by Korea Life to
    the three Shindongah subsidiaries, Shindongah Construction, SDA
    International, and Dongah Flour. Choi had been serving a five-year
    prison term on capital flight charges but was released on bail on
    October 22.

    (Park Jong-sae, jongsae@chosun.com)



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