By Kim Rahn
Staff Reporter

The prosecution plans to summon the president of a major local bank to confirm allegations that the lender was pressured to extend a large loan to the state-run rail operator to finance its failed oil development project.

An investigator said Friday that the prosecution will investigate Woori Bank president Hwang Young-key next week to look into his alleged meeting with Kim Se-ho, former vice construction-transportation minister last July.

There are allegations that Kim, then president of Korea Railroad (Korail), pressured Hwang into extending $6.5 million in loans to the rail authority to finance its multibillion-dollar oil project.

The prosecution is considering whether to investigate the National Intelligence Service (NIS) as spy agency officials attended the meeting with Kim and Hwang.

The prosecution secured testimonies that Hwang, Kim and three NIS officials lunched together in the Korail headquarters in Taejon on July 22.

Korail launched the oil project on Sakhalin Island, Russia, last August after setting up Korea Crude Oil with a real estate developer, Jeon Dae-wul, and money borrowed from Woori Bank.

But it withdrew from the project after its Russian counterpart, Alpha-Eko, failed to obtain the Russian government’s approval, losing the $3.5 million down payment.

Suspicions are emerging that the NIS was involved in the oil scandal along with other government agencies and ministries, including the presidential office of Chong Wa Dae.

Investigators suspect Kim asked for Hwang’s influence in getting the $6.5-million loans for the down payment of the contract. Kim was arrested Wednesday night for his involvement in the influence peddling scandal over the project.

The prosecution is also investigating whether the NIS played any role in the bank’s lending to Korail.

A Woori Bank official denied the allegation and said Hwang went to Korail headquarters to meet Kim right after becoming president of the bank as the rail operator is a major borrower.

The official added that Korail first requested the loan on July 28 and that Hwang played no role in the loan procedure.

The NIS also said in its statement that its officials had lunch with Korail managers and Hwang, who was acquainted with the officials.

It added that they exchanged greetings and talked only about the bullet train operation, not about the loans.

The prosecution also plans to summon Commerce, Industry and Energy Minister Lee Hee-beom, to confirm allegations that Kim sought Lee’s influence on the oil project.

Rep. Lee Kwang-jae of the ruling Uri Party, who introduced Jeon to the oil development expert Huh Mun-suk, will also be summoned next week. Jeon has claimed Rep. Lee was deeply involved in the project.

But the lawmaker has denied the allegations.

rahnita@koreatimes.co.kr