By Soh Ji-young
Staff Reporter

The prosecution said it will soon launch an investigation into two state agencies responsible for losing hundreds of billions of won in taxpayers’ money due to the mismanagement of public funds used to bail out non-viable financial institutions hit by the 1997 Asian financial crisis.

The Supreme Public Prosecutors’ Office will soon begin an investigation into the Korea Asset Management Corp (KAMCO) and Korea Deposit Insurance Corp. (KDIC), as requested by the Board of Audit and Inspection (BAI), senior prosecutor Moon Hyo-nam said.

On Thursday, the BAI announced that the government had lost 1.08 trillion won in public funds during the past three years, with KAMCO and KDIC wasting more than 823 billion won in taxpayers’ money.

The audit agency said it decided to press charges after KAMCO, which is responsible for public funds management, was discovered to have sold off 9.9 billion won worth of insolvent bonds vouched by the government to an American investment company at a mere 100 won in 1999. The foreign firm was later able to reap 8.9 billion won in profits by selling off the bonds in 2000.

The BAI also filed a complaint against four KDIC officials and two KAMCO officials for embezzling more than 800 million won of public and private funds.

``The senior officials at KAMCO will not be able to evade responsibility,’’ a BAI official said.

In a separate development, the Supreme Public Prosecutors’ Office on Friday indicted former Sungwon Firm chairman Kim Song-pil and 25 other businessmen on charges of embezzling company funds and acquiring illegal loans.

Their corruptive actions resulted in more than 5.8 trillion won in losses for financial services companies, which were later bailed out through public funds which came from taxpayers’ money.

Kim is charged with receiving more than 420 billion won in illegal loans and misappropriating more than 20 billion won of company funds.

Dongah Group chairman Choi Won-suk was indicted without physical arrest for rigging the company’s accounting books to receive 600 billion won of loans and illegally supporting 90 billion won to company affiliates.


jysoh@koreatimes.co.kr