It has been revealed that the Hyundai group used bribes to have debts of W55 billion written off. A massive amount of "lobbying" money was passed to the president of a famous accounting company and ended up in the hands of a high-ranking executive at a state-run bank, and there are suggestions it was possible there was involvement on the part of important figures in politics and government, including officials responsible for financial supervisory activities.
It was at a certain cost to society that poorly performing companies were given public funds for restructuring. It is something to applaud at if companies temporarily in a state of crisis because of the shock of the Asian financial crisis were brought to life with the people's taxes. Hyundai, however, abused the restructuring program to, through a dirty deal, have some of the debt at one of its subsidiaries canceled so it could them buy them back for cheap. It evaded the regulation intended to prevent moral laxness by using a company specializing in restructuring, and the "lobbying" funds were used to fake a bidding process and steal information on the bidding price. The subsidiaries resuscitated that way then served as a reservoir for creating funds used in handing over managerial rights and forming its massive slush funds. Hyundai used companies kept alive by public funds intended to aid restructuring to inflate its size as a tool for handing over rights to the group to the next generation. That is "shocking," as the prosecution is saying.
The financial supervisory authorities and officials citied has having been targeted by the "lobbying" say that proper procedures were followed. This all transpired at a time when the market was overflowing with bad bonds, so offering even the slightest convenience would have been a massive favor, even if proper procedures were followed. Key officials are saying they received money but illegal was done, but that is like trying to hide the Heavens with your hand.
This is just the first finding in the inquiry into where Hyundai spent its slush money. Its slush funds grew to become tens of billions, and additional illegal "lobbying" and corruption continue to be discovered. Investigating how the money was used is important, but the prosecution must not just go through the motions and overlook the questions about how Hyundai put its slush funds together and whether it used roundabout tactics to handing over managerial rights. Irregularities relating to the use of public funds must also not be swept under the rug.
The Hankyoreh, 17 April 2006.
[Translations by Seoul Selection]
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