Legal Punishment on HMM Is Not Appropriate

President Kim Dae-jung said yesterday if the money Hyundai Merchant Marine (HMM) transferred to North Korea were used for inter-Korean economic cooperation projects, it should not be given legal punishment for sustained development of the inter-Korean relations and the nation`s interest in the future.

Park Sun-sook, a senior presidential aide quoted President Kim as saying like this after he was briefed on the result of the Board of Audit and Inspection (BAI)`s investigation into the allegation of HMM`s money transfer to the North by BAI head Lee Jong-nam.

The president`s saying is tantamount to his acknowledgement of HMM`s remittance of a large sum of money to Pyongyang. According to the state inspectors, HMM sent 223.5 billion won to the North.

Seven projects in Gaesung industrial complex, railway, communications, and tourism that Hyundai has been pursuing are private economic projects, but at the same time, they have been promoted as part of inter-Korean cooperation ones, said President Kim.

He continued that the handling with this matter should not lead to derailment of the inter-Korean relations or withdrawal of already secured business projects, thereby damaging national interests. He stressed that "this matter should not have a bad impact on railway and road connection projects and reunion of family members separated by the Korean War."

Asked whether this saying is different from his previous remarks that Cheong Wa Dae is not related by reporters, the Presidential aide just said the answer could be replaced with the president`s saying and didn`t give any further explanation.

Meanwhile, according to the BAI`s audit report, of a total of 400 billion won HMM took out in loans in June 2000, it spent 100 billion won in Hyundai Engineering and Construction`s purchasing commercial papers, used 76.5 billion won in HMM` repayments and used the remaining 223.5 billion won for North Korea related projects.

The BAI announced it confirmed that another 100 billion won taken out in loans in May 2000 was all used for operating cost and repayment of short-term debts.

As for the 223.5 billion won, Hyundai explained that under the name of "North Korea Gaesung industrial complex project," the money used on rent of the industrial park, foundation work, and facility construction within the park.

The BAI has decided not to charge some officials of HMM, departing from its previous plan, as HMM explained where the money that it took out in loans from the Korea Development Bank was used.

Seung-Mo Yoon Dong-Ki Sung ysmo@donga.com esprit@donga.com