S. Korean Bankers Held in Scandal
The presidents of two leading South Korean banks were arrested Wednesday on charges they took bribes in exchange for loans to a now-bankrupt steel company.
Shin Kwang Shik of Korea First Bank and Woo Chan Mok of Chohung Bank received $470,000 each in bribes in exchange for loans to Hanbo, the country’s second-largest steel firm, prosecutors alleged.
Early today, the heads of two more banks were summoned in the case. Prosecutors were questioning Chang Myung Son, president of the Korea Exchange Bank, and Kim Shi Hyung, head of the state-run Korea Development Bank, on whether they were involved.
The four banks are the main creditors of the Hanbo group’s flagship, Hanbo Iron & Steel Co., which collapsed Jan. 23 under $6 billion in debt, mostly in bank loans. Three other Hanbo subsidiaries have also gone under.
Critics allege that the steel firm, with $105 million in capital, could not have received such big loans without help from corrupt government officials.
The founder and chairman of Hanbo, Chung Tai Soo, was arrested earlier on bribery charges. News reports said he gave prosecutors a list of politicians he bribed.
A key aide to opposition presidential hopeful Kim Dae Jung said he received about $188,000 in cash from Hanbo but called it a legitimate political contribution.
Start your day right
Sign up for Essential California for news, features and recommendations from the L.A. Times and beyond in your inbox six days a week.
You may occasionally receive promotional content from the Los Angeles Times.
