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

(ATTN: MODIFIES headline, lead to 4th para, ADDS ruling party quote in paras 7, 8)
By Kim Hyun
SEOUL, Dec. 11 (Yonhap) -- Prosecutors requested an arrest warrant for a key
supporter of former President Roh Moo-hyun on Thursday, accusing him of tax
evasion, insider trading and bribery in a case that deals a sharp blow to Roh.
Park Yeon-cha, chief of shoe manufacturer and Nike outsourcing firm Taekwang
Industry Co., was suspected of pocketing 20 billion won (US$14.7 million) in
profits from a brokerage house prior to its takeover announcement in 2005.
He was also alleged to have evaded 29 billion won in capital gains taxes.
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. The court is expected to decide on Friday.
"We requested a warrant for him as it is a serious case and we fear he may
escape," Choi told reporters.
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, Park
said, "I have nothing to admit and I followed the rules... I apologize to
everyone for causing concern."
The months-long probe prompted cynical criticism of Roh, who while in office
prided himself on rejecting bribery and sought to distance himself from
predecessors tarnished by scandals involving relatives. The former president has
been reserved over the probe.
"The Roh Moo-hyun administration was white on the surface but black deep inside,"
said Rep. Yoon Sang-hyun, spokesman of the conservative ruling Grand National
Party.
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 the elder Roh, Park and Nonghyup's chief at that
time, Chung Dae-kun, all of whom are hometown acquaintances, played a major role
in the transaction.
Roh Gun-pyeong is suspected of influencing Nonghyup to buy Sejong Securities and
accepting bribes from 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 what had been
offered by another bidder. As much as 2 billion won was handed over to the
Nonghyup chief in bribes, prosecutors allege.
Prosecutors say Park evaded income taxes worth tens of billions of won by
funneling his earnings through his paper company in Hong Kong.
Liberals argue the incumbent Lee Myung-bak government may be seeking to score
political points against the ex-president, an acerbic critic of 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
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