Six Key Figures in NK Payoff Scandal Convicted

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posted on Sep, 29 2003 @ 02:30 AM
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(Korea Times)

Six Key Figures in NK Payoff Scandal Convicted

By Na Jeong-ju
Staff Reporter
A Seoul court yesterday convicted Lim Dong-won, a former state spy
agency chief, and five other figures accused in a high-profile
scandal where the South Korean government paid off North Korea in
exchange for the historic inter-Korean summit.

Hyundai, which undertook the $500 million payment in 2000, got help
from the former administration and National Intelligence Service
when it made the clandestine payment to a North Korean bank account,
Chief Judge Kim Sang-gyun from the Seoul District Court said.

The figures are subject to criminal punishment because they broke
the law when they worked together on the money transfer, which was
carried out days before the inter-Korean summit.

However, the court suspended the prison terms handed out to the six
people, saying the payment is regarded as an act of governance by
the former administration that eventually helped bring the two
Koreas closer by paving the way for the historic summit.

Lim received a suspended 18-month prison term, while Lee Ki-ho, then
chief economic advisor to former President Kim Dae-jung, was
sentenced to three years in prison. Lim and Lee played key roles
when Hyundai borrowed money from the state-controlled Korea
Development Bank (KDB) to raise the funds that were sent to North
Korea, the court said. Lim said through his lawyer after the verdict
that he would appeal the decision.

Kim Yoon-kyu, then deputy chairman of Hyundai Asan, the Hyundai
division in charge of business in North Korea, received a suspended
one-year jail term, while former senior intelligence official Choi
Kyu-baik was fined 10 million won.

Former top finance officials Lee Keun-young and Park Sang-bae were
sentenced to three and two-and-a-half year prison terms,
respectively, but both were suspended.

Judge Kim said the 2000 summit between former President Kim and
North Korean leader Kim Jong-il brought ``incalculable'' changes to
the relations between the two Koreas and the effect was considered
when he decided the sentences.

Earlier, the court dropped charges against the late businessman
Chung Mong-hun after the former Hyundai Asan chairman committed
suicide early last month following his indictment and an intense
inquiry into his role in stashing secret funds.

The sentence for Park Jie-won, former President Kim's top aide and
Culture-Tourism minister at the time who is accused of masterminding
the payoff scheme, was delayed because he is still under
investigation regarding the secret funds.

Following a 70-day probe into the ``cash-for-summit'' scandal,
independent counsel investigators said Park pulled the strings for
the payoff after he secretly met North Korean officials in April
2000, two months before the summit.

When Hyundai was unable to raise the $350 million it promised
Pyongyang in exchange for exclusive business rights, Park pressured
then presidential economic advisor Lee Ki-ho and Financial
Supervisory Commission chief Lee Keun-young to get the state-run KDB
to advance the funds. The bank then extended $450 million in loans
to Hyundai, which included the $100 million the Kim administration
paid for the summit.

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