Prosecutor's office to launch probe of insolvent companies

The public prosecutor`s office began a full-scale investigation of over 400 insolvent companies that are under workout, composition, or court receivership and their owners for corruption.

The prosecutor¡¯s office is known to have obtained information on these insolvent companies from the Financial Supervisory Commission a month ago and has begun analyzing the information in detail. The office is planning to launch a full-scale investigation from early September into 44 insolvent companies, including the Daewoo Group and its affiliates, as soon as the result of the special audit by the Financial Supervisory Commission becomes available.

The Ministry of Justice held a meeting on Monday for the directors of prosecutor`s offices nationwide at its building with Kim Jung-Kil, the Minister of Justice, and Park Soon-Yong, the public prosecutor general, to discuss measures for the restoration of social discipline and the elimination of corruption and irregularities among insolvent companies and social leaders.

In an admonitory speech, public prosecutor general Park Soon-Yong asserted that the level of corruption and moral hazard have surpassed tolerable limits in our society as disclosed in the investigations into the processes of restructuring companies that have been injected with public funds, and called for stricter anti-corruption investigations to restore social order.

In consequence, the prosecutor¡¯s office decided to focus the investigation on the concealment and disposition of assets from companies under court receivership, composition or workout, misrepresentations to dispose of company assets at bargain prices, and intentional bankruptcies after obtaining huge loans to repurchase assets at a low prices.

The prosecutor¡¯s office will form a cooperative investigating team with the National Tax Administration and similar institutions to recover concealed assets by the management of the insolvent companies and strongly punish the management of financial institutions found guilty of corruption charges related to the insolvent firms.

In addition, the prosecutor¡¯s office is planning a cooperative investigation with Chinese authorities and even delegating a prosecutor to China to investigate the details surrounding the importation of lead-injected crabs and glob fish.

The prosecutor`s office is also working on politicians accused of offenses in the April 13 national election and politicians indicted by the National Election Commission for election expenses. The office plans to place criminal charges on these politicians if they are found guilty.

The prosecutor¡¯s office plans to reinforce investigations of cases of tax evasion, bribery and concealment of assets in foreign countries by public workers and social leaders. Moreover, the office plans to strongly deal with self-interest activities of certain interest groups and illegal violence to restore social discipline.

Yang Ki-Dae kee@donga.com