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Prosecutors Raid Dongkuk Steel on Suspicion of 20 Billion Won Slush Fund
Slush Funds
Prosecutors Raid Dongkuk Steel on Suspicion of 20 Billion Won Slush Fund
  • By matthew
  • March 30, 2015, 05:30
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Jang Se-joo, chairman of Dongkuk Steel.
Jang Se-joo, chairman of Dongkuk Steel.

 

Prosecutors raided the headquarters of Dongkuk Steel in Seoul, and the house of its Chairman Jang Se-joo, on the morning on March 28. 

They allegedly created a slush fund of 20 billion won (US$18.07 million), pickpocketing company capital with business practices at home and abroad. The prosecutors placed travel bans on Chairman Jang and 10 other officials from the company.

According to Seoul Central District Public Prosecutors Office, Dongkuk Steel created extra costs from price exaggerations while importing intermediary goods, including scrap metal, from overseas businesses in Russia and Japan. In the process, the company put money into the accounts of its overseas corporations and handled some of them as losses, setting up a secret fund of 20 billion won (US$18.07 million).

The prosecutors also confirmed some of the slush funds being used after reviewing data from investigative authorities in the U.S. 

Chairman Jang gambled several times at luxurious hotels in Las Vegas. Some of the money he used was from the secret funds, which were sent to its branch in the U.S., said the prosecutors. 

The prosecutors are planning to summon him as soon as they finish analyzing the seized articles. 

Meanwhile, they are also currently investigating Keangnam Enterprises, POSCO Engineering & Construction, and SK Engineering & Construction on charges of corruption of resource development, the creation of slush funds while running a business in Vietnam, and bid rigging of the government-ordered construction, respectively.