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
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
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
, an aide to President Kim, and
, the No.
3 official in the New Korea Party. Both were charged with
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
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
Reuters contributed to this report.
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