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SK Group chairman faces grilling
SEOUL, South Korea (Reuters) -- Prosecutors summoned the head of South Korea's fourth-largest business conglomerate, SK Group, for questioning on Wednesday over alleged illegal stock deals involving SK affiliates. New South Korean President Roh Moo-hyun has signalled he wants to clamp down on the country's family-run business empires, after previously warning that without reform the sprawling companies could be sowing the seeds for another financial crisis. Son Kil-seung was summoned less than two weeks after two top executives of SK Corp, South Korea's biggest oil refiner and the core unit of the SK Group, were arrested on charges of illegal stock transactions. An official at the Seoul District Public Prosecutor's Office said Son was being questioned over his role in alleged illegal stock deals involving SK Corp and alleged accounting irregularities involving SK Global. "I know many people are concerned (about this case) and I will answer sincerely," Son told reporters as he entered the building, which YTN cable news network broadcast live. Son also heads the Federation of Korean Industries, an influential business lobby group, and it is the first time in the federation's 41-year history its incumbent leader has been summoned by prosecutors for questioning. The Fair Trade Commission said on Tuesday it would investigate the business practices of Samsung and five other big groups, extending a crackdown on the country's family-run conglomerates. 'Dubious transactions'"We judge cross-shareholding and dubious intra-group transactions are still going on despite repeated calls for correction," Chang Hang-seok, a director of the investigation team at the Fair Trade Commission, told a news conference on Tuesday. The financial watchdog would investigate Samsung Group, LG Group, SK Group, Hyundai Motor Group, Hyundai Group, and Hyundai Heavy Industries over the next three months, he said. The companies all said they would willingly cooperate. Business practices such as mutual debt guarantees within conglomerates have been blamed for fanning the country's plunge into a financial crisis in 1997, when it received a $58 billion bailout arranged by the International Monetary Fund. Copyright 2003 Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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