The individual known as Kim Jae Rok is being investigated by the Supreme Prosecutor's Office, and the case is becoming serious. Last week he was arrested, and on Sunday investigators searched the offices of Hyundai Motors and its subsidiaries, believing that he had been given billions of cash from the automobile manufacturer's slush finds. Prosecutors are also looking into whether Kim engaged in any illegal activities in the course of the Hanwha group's acquisition of Korea Life in 2002 and Lone Star's acquisition of Korea Exchange Bank in 2003.
Kim is understood to have been a key player in the course of corporate restructuring and bringing in foreign investment during the government of Kim Dae Jung. He was involved in dozens of deals selling companies gone bad to overseas buyers. He knew elected and other high-ranking government officials and was known as a man with connections in the financial industry. He was so influential that he even went to the head of the Financial Supervisory Service to recommend someone for the president of a bank.
That is what makes this case potentially more than just an issue of personal corruption and gives it the explosive potential to spread to the whole process of financial and corporate restructuring after the foreign currency crisis of 1997. Already you see Kim's acquaintances, big names in finance and politics, being touched by the investigation. The prosecution's pursuit of Hyundai slush funds hints at the possibility the investigation is going to spread in other directions, so a lot of shockwaves can be expected.
Kim denies all the accusations, saying he received "legal consultation fees" and that there were "no illegal solicitations." The prosecution needs to determine whether there were any favors illegally asked of people in government ministries and in finance, and whether any of them were paid. There are some who suggest the powers that be are looking for someone to blame for the policy of selling badly performing companies to overseas investors, or that this is an investigation targeting a specific political element. This investigation must not turn out like the one involving Yoon Sang Lim, which found very little while inciting a lot of suspicion. The only way to eliminate unnecessary suspicion this time for there to be a swift and fair investigation.
The Hankyoreh, 27 March 2006.
[Translations by Seoul Selection]
[Editorial] The Country Is Watching Kim Jae Rok Investigation |
