Prosecutors said they learned Tuesday that in March 2000, during the preliminary meetings for the inter-Korean summit talks, North Korea asked Chung for $1 billion in return for the North's agreeing to a summit meeting. Chung initially rejected the offer, but being aware of Cheong Wa Dae's eagerness to hold the summit meeting, later agreed to send $500 million for the deal.

According to sources from Hyundai Group and the special prosecutors' team led by Song Doo-hwan, Song ho-kyung, a deputy director of North Korea's Asia Pacific Peace Committee, met with Park Jie-won, then culture minister, in Shanghai on March 17, 2000. Later, Song met with Chung and proposed the $1 billion deal. When Chung turned it down, Song announced that negotiations were over and that there would be no summit. Chung informed Park about North Korea's offer.

Chung had not expected that the summit would cost him money, prosecutors said, and money was not discussed during an earlier meeting with the North in Singapore. Chung eventually decided, reportedly, after Cheong Wa Dae showed great interest in holding the summit talks, to consider making a payment for a summit.

While the third meeting with North Korea was ongoing, Chung had a separate negotiation with North Korean officials at which both sides agreed upon a $500 million transfer. Subsequent negotiations on holding the summit talks went smoothly; then during the fourth meeting on April 8, 2000 it was decided by both sides that the inter-Korean summit talks would be held.

An official from the special prosecutors' team said that there was a good chance that Hyundai's economic cooperation business with North Korea could have been fabricated to meet North Korea's demands. (Choi Jae-hyeok, jhchoi@chosun.com )