|
Officials close to Kim charged
February 11, 1997
in South Korea loan scandal
Web posted at: 1:55 p.m. EST (1845 GMT)SEOUL, South Korea (CNN) -- South Korean authorities arrested two ruling party officials Tuesday, including a close confidante of President Kim Young-sam, in the widening Hanbo steel scandal.
Hong In-gil, a senior official at the presidential Blue House until a few months before he was elected to parliament last year, and Chung Jae-chul, the third-ranking New Korea Party official, were charged with taking kickbacks from the founder of the now-bankrupt Hanbo steel company.
Specifically, the two officials were accused of receiving money from Hanbo founder Chung Tae-soo, then pressuring banks to provide loans to the troubled steelmaker.
The arrests of the first two politicians implicated in the loan scheme bring the Hanbo scandal even closer to president Kim -- an unwelcome event, especially in an election year.
The scandal has dealt a serious blow to Kim, who has led an aggressive anti-corruption campaign throughout his years in office.
Some analysts believe the arrest of such prominent politicians close to the president could hurt the ruling party's chances in the presidential elections in December.
Hanbo steel collapsed last month under a debt of nearly $6 billion, mostly in bank loans.
Two bank officials previously were arrested for taking money from Hanbo. Hanbo's founder Chung has already been arrested on charges of fraud and other violations.
Additional high-ranking officials could be implicated in the scandal. Prosecutors are still questioning Chung on whether he bribed other bankers or government officials.
Seoul Bureau Chief Sohn Jie-Ae contributed to this report.
Related stories:
- Korean businessman arrested in growing scandal - January 31, 1997
- S. Korean police raid bankrupt company offices - January 28, 1997
- Bankruptcy scandal adds to S. Korean government woes - January 27, 1997
Related sites:
Note: Pages will open in a new browser windowExternal sites are not endorsed by CNN Interactive.
Tell us what you think!
You said it...
© 1997 Cable News Network, Inc.
All Rights Reserved.