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Loan scandal shakes core of South Korean government
Home minister resigns; prime minister, party chairman offer to step down
February 12, 1997
Web posted at: 12:15 p.m. EST (1715 GMT)SEOUL, South Korea (CNN) -- One cabinet member has resigned, and the prime minister has said he is prepared to do so, as a loan scandal continued to rock South Korea's government Wednesday.
Prime Minister Lee Soo-sung said through a spokesman that he holds himself morally responsible for the scandal, although he said he was not directly involved. New Korea Party chairman Lee Hong-koo has reportedly also offered to resign.
"I believe the prime minister must take responsibility," spokesman Ahn Kwan-ki quoted Prime Minister Lee as saying.
Home Affairs Minister Kim Woo-suk tendered his resignation Wednesday, the same day prosecutors summoned him for questioning in the rapidly expanding scandal.
Two top ruling party lawmakers have been arrested and charged with accepting kickbacks in connection with loans for Hanbo Steel, which collapsed in January under a $6 billion debt. Allegations almost immediately surfaced that government influence had made possible millions of dollars in bank loans.
President Kim Young-sam ordered an investigation into the scandal, which resulted in the arrests of Hanbo founder Chung Tae-soo and two bankers.
Following Chung's arrest, the investigation moved deeper into Kim's government, and on Tuesday prosecutors arrested Hong In-gil , an aide to President Kim, and Chung Jae-chul , the No. 3 official in the New Korea Party. Both were charged with accepting kickbacks.
On Wednesday, prosecutors also were questioning Hwang Byong- tae, a New Korea Party legislator and former ambassador to China, and Kwon Ro-gap, an aide to main opposition leader Kim Dae-jung.
President Kim had not responded to the resignation offers of his prime minister and party chairman. Party chairman Lee had been seeking his party's nomination to run for president in December's scheduled elections. Kim cannot run for a second term.
Reuters 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
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