By Na Jeong-ju
Staff Reporter
SK Group chairman Son Kil-seung will be summoned on Thursday for questioning over allegations that he misappropriated about 100 billion won in slush funds stashed through SK’s shipping subsidiary.

Prosecutors said on Wednesday Son used the money to buy futures in overseas markets without talking to other company executives. The prosecution has at the moment no evidence that he discussed the futures dealings with SK owner Chey Tae-won.

Son may face arrest following the inquiry, which will also focus on the group’s illegal funding during the 2002 presidential election. Son earlier admitted to collecting millions of dollars in secret funds for the purpose of lobbying politicians in 2002.

In October, the National Tax Service alleged Son masterminded the stashing of as much as 239.2 billion won through the manipulation of SK shipping’s accounting books and levied 84.5 billion won in penalties against the chairman.

Son was convicted in June on charges of accounting fraud and illegal stock trading involving SK Global, the main trading arm of the country’s third largest conglomerate, but was released on a suspended jail term. Chey, SK Corporation’s chairman and SK’s de-facto owner, was also convicted of the same charges and imprisoned following the verdict. He was later released on bail and returned to the SK management.

The prosecution also said it has found evidence that Kumho Asiana offered 2 billion won in illegal political funds to two major political parties during the presidential election.

Prosecutors said the country’s 12th-largest conglomerate provided 1 billion won in certificates of deposit (CDs) and corporate bonds to the opposition Grand National Party. It also gave the same amount in cash and corporate bonds to the then-ruling Millennium Democratic Party, the prosecutors said.

The bonds received by the parties matured in October and November last year but were not converted into cash, an indication that the parties may be still holding them, according to the prosecution.

Kumho Asiana is one of a dozen conglomerates that have been accused of offering illegal funds to politicians during the election campaign.

The prosecution also raided Daewoo Engineering & Construction’s headquarters in Seoul and seized accounting books over allegations that the company set up slush funds between 2000 and 2002.

The investigation of Daewoo E&C appears unrelated to the illegal campaign funding by conglomerates in 2002, and comes one day after prosecutors searched Hanwha Group’s offices.

Prosecutors explained the action followed a tip that Nam Sang-kook, the firm’s former chairman, diverted money that the firm had stashed while building Trumpworld, a luxurious apartment in Yoido, Seoul. The prosecution took Nam into custody following the raid.

Travel bans were placed on about 10 company officials with senior executives being summoned for questioning, prosecutors said.

Prosecutors said they are tracing Nam’s and the construction firm’s bank accounts to gather evidence.

Earlier, the prosecution said it was looking into allegations that Daewoo E&C stashed slush funds while tendering for buildings in Kangwon Land, a casino and resort complex in Kangwon Province. A former ruling party official, affiliated to former President Kim Dae-jung, is suspected of being involved in the firm’s purchase of the site for Trumpworld, the prosecution said.

``We have found many irregularities regarding Daewoo E&C, including the Trumpworld and Kangwon Land cases,’’ a prosecution official said, indicating officials involved may be heavily punished.

Daewoo E&C is rebounding after concluding government bailout programs for troubled firms last month. The firm signed up with creditor banks for the bailout programs in 2000.

The prosecution also summoned former Pusan Chamber of Commerce and Industry chairman Kim Sung-chul for questioning. He is one of the businessmen under investigation for collecting political funds from regional enterprises to support the presidential campaign of President Roh Moo-hyun.

jj@koreatimes.co.kr