Arrest warrant sought for ex-president's sponsor in corruption probe

By Kim Hyun
SEOUL, Dec. 11 (Yonhap) -- Prosecutors requested an arrest warrant for a man who
sponsored former President Roh Moo-hyun on allegations of tax evasion and insider
trading on Thursday, heightening a corruption probe into associates of the
previous liberal administration.
Park Yeon-cha, chief of a leading shoemaker and Nike outsourcing firm, Taekwang
Industry Co., is suspected of reaping 20 billion won (US$14.7 million) in profits
from a brokerage house prior to its takeover announcement, acquiring a state-run
chemical firm at below-market price and evading taxes on both deals.
After questioning Park in a day-long session, prosecutors requested a warrant
from the Seoul Central District Court to take him into custody until charges are
laid out for trial, said prosecution spokesman Choi Jai-kyeong.
Park admitted to tax evasion but denied the other allegations.
"As for the tax evasion allegation, I didn't know the tax regulations at the time
but I admit to (the allegations)," he told reporters as he left the Supreme
Prosecutors Office on Wednesday night. As for the rest of the accusations, "I
have nothing to admit and I followed the rules... I apologize to everyone for
causing concern."
The months-long probe has dealt a sharp blow to Roh, who outwardly shunned
bribery while in office in an attempt to distance himself from his predecessors.
The former president has been reserved over the scandal.
Roh's elder brother, Roh Gun-pyeong, is already in custody on allegations of
accepting bribes linked to the scandal.
Investigators are trying to determine how the state-run conglomerate National
Agricultural Cooperative Federation, or Nonghyup, came to take over the troubled
brokerage house Sejong Securities Co. despite its initial objection. They suspect
personal connections involving Roh Gun-pyeong, Park and the Nonghyup's chief at
that time, Chung Dae-kun, who are hometown acquaintances, played a main role.
Roh Gun-pyeong is suspected of influencing Nonghyup to buy Sejong Securities and
accepting bribes from the Sejong's lobbyists.
Park allegedly reaped more than 20 billion won in profits by selling his shares
in Sejong when the takeover announcement was made. Investigators suspect Park was
informed of the looming takeover and bought Sejong shares en masse half a year
before the takeover was sealed.
Nonghyup bought Sejong for 110 billion won in January 2006.
Park was also suspected of acquiring Nonghyup's chemical manufacturing affiliate,
HU-CHEMS for 145.5 billion won, some 7 billion won less than suggested by another
bidder.
Through his paper company in Hong Kong, prosecutors say Park allegedly evaded
income taxes worth tens of billions of won.
Liberals argue the incumbent Lee Myung-bak government may be seeking to score
political points against the ex-president, who still hurls acerbic criticism at
Lee's free market policies and hardline position on North Korea. Trying to dispel
the accusation, the prosecution's spokesman said earlier this week, "There is no
ulterior motive behind our investigation."
Roh retired to his rural hometown of Bonghwa in South Gyeongsang Province in
February.
hkim@yna.co.kr