Business

Arrest sought for mastermind of 25 billion won slush fund

Photo by Republic of Korea/flikr. Reproduced under CC2.0 license
James Hyams
Written by James Hyams

SEOUL – Prosecutors on Monday sought an arrest warrant for a former construction firm head for allegedly embezzling company funds involved in former President Lee Myung-bak’s botched energy diplomacy project.

Sung Wan-jong, former head of the troubled Keangnam Enterprises Ltd., is suspected of taking 80 billion won (US$74 million) in government loans by exaggerating the profit his company was expected to make by investing in the Kamchatka oil exploration project in Russia. He allegedly used part of the funds to create a slush fund worth 25 billion won.

Sung also faces charges of accounting fraud worth 950 billion won from 2008 to 2013, the duration of President Lee’s term.

He allegedly exploited the little-strings-attached loan policy pushed by then President Lee, who encouraged private investment in overseas resource projects. The purpose of the energy diplomacy initiative was to lower the cost of imported oil, which makes up more than 95 percent of South Korea’s total energy resources. Critics, however, say the project wasted taxpayer money and reaped disappointing results.

A hearing is due Wednesday to determine the legitimacy of the warrant.

About the author

James Hyams

James Hyams

James Hyams juggles several careers including being a journalist and a social worker. James has an avid interest in 'telling it as it is', exposing matters of public interest, and reviving investigative journalism in the new digital era. Testimony to this is his thesis titled: “U.S. Government secrecy and the withering watchdog: Is WikiLeaks the answer?”

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