Former chief of KDB summoned over corruption allegations

 A former head of the Korea Development Bank was summoned Monday as state prosecutors accelerated their investigation into a high-profile corruption case involving a local shipbuilder.

Kang Man-soo, 71, appeared before the Seoul High Prosecutors' Office as a suspect on charges of illegally exerting influence on Daewoo Shipbuilding & Marine Engineering Co. to invest in a local biotech firm run by his acquaintance. Daewoo Shipbuilding provided some 4.4 billion won ($3.9 million) for the firm's research projects between 2012 and 2013, but the funding stopped following Kang's retirement, according to prosecutors.

The KDB is the financially troubled shipbuilder's largest shareholder. Kang headed the bank from 2011 to 2013.

While admitting to having advised the shipyard to invest in the company, identified only by the initial B, he has declined any wrongdoing involved in the process.

"I have worked for this country my whole life," Kang told reporters before entering the prosecutors' office. "I didn't do anything shameful while working as a public official."

Kang Man-soo, former chief of the Korea Development Bank, is surrounded by reporters before entering the Seoul High Prosecutors' Office in southern Seoul to be questioned over a high-profile corruption case involving a local shipbuilder on Sept. 19. (Yonhap)

The summons comes less than a week after prosecutors indicted the biotech firm's head, identified only by his surname Kim, on charges of fraud and other irregularities.

Prosecutors also suspect that the 71-year-old Kang was involved in unlawfully giving loans to Hansung Enterprise Co., a local seafood maker, in 2011. The company chief, Lim Woo-kun, went to the same high school as Kang.

Kang served as the country's finance minister from 2008 to 2009 before working as the special adviser to the president for the economy during the Lee Myung-bak administration from 2009 to 2011.

His alleged irregularities came to the surface after prosecutors launched a full-fledged probe into the shipyard earlier this year. A number of company executives have been indicted over their involvement in the corporate corruption scheme thus far.

The shipbuilding industry, once regarded as the backbone of the country's economic growth and job creation, has been reeling from mounting losses caused by an industrywide slump and increased costs.

The country's top three shipyards, including Daewoo Shipbuilding, suffered a combined operating loss of 8.5 trillion won last year due largely to increased costs stemming from a delay in the construction of offshore facilities and the industrywide slump, with Daewoo alone posting a 5.5 trillion won loss.

The shipbuilders have recently drawn up sweeping self-rescue programs worth 10.35 trillion won in a desperate bid to overcome the protracted slump and mounting losses. (Yonhap)