(LEAD) Arrest warrant sought for KTF chief in rebate probe

(ATTN: ADDS amount of rebate in lead; REPHRASES paras 3, 4)
SEOUL, Sept. 21 (Yonhap) -- Prosecutors Sunday sought an arrest warrant for the head of KTF Co., South Korea's second-largest wireless carrier, on charges that he took 2.5 billion won (US$2.2 million) in kickbacks from suppliers in return for buying their products.

KTF President Cho Young-ju was detained Friday in a surprise raid on his office
by prosecutors. He is suspected of having taken bribes from the suppliers since
assuming the post in 2005.
Investigators believe the suppliers created slush funds for Cho by inflating the
sales prices of their goods. Cho is suspected of opening bank accounts under
borrowed names, including his son's, in order to receive the rebates, some of the
money allegedly streaming to politicians in the form of bribes.
Investigations opened this week under suspicions that Cho took billions of won
from a supplier, with prosecutors raiding KTF headquarters and confiscating
contract documents and computer hard disks.
The timing of the probe is especially bad for KTF, which is currently pursuing a
handful of new projects to outperform larger rival SK Telecom in the country's
saturated mobile carrier market.
KTF is set to merge with parent company KT Corp. later this year and is engaged
in cutthroat competition with SK Telecom over the emerging video-based
third-generation (3G) telephony service.
hayney@yna.co.kr
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