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2 S. Korean Bankers Held in Scandal

<i> From Associated Press</i>

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.

The Hanbo group’s flagship, Hanbo Iron & Steel Co., 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 and politicians.

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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.

Kwon Ro Gap, aide to Kim and a deputy leader of the National Congress for New Politics, was the first politician to admit receiving money from Hanbo. Prosecutors said they will summon Kwon for questioning.


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