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Prosecutors expand probe into Yongsan development project

Feb. 23, 2016 - 16:06 By 옥현주

Prosecutors on Tuesday raided the residence and office of a close aide to an ex-chief of South Korea’s rail operator in its widening probe of suspected slush funds in connection with a now-defunct urban development project.

Officials carry out boxes of confiscated items Tuesday from the office of an aide to the former president of the Korea Railroad Corp. in Yeongdeungpo, Seoul. (Yonhap)

The Seoul Central District Prosecutors’ Office said that investigators seized computer hard disks, internal reports and account books related to the Yongsan development plan at the residence and office of the man, identified only by his surname Sohn. He is known as a close confidant to Huh Joon-young, the former president of the state-run rail company KORAIL.

Huh Joon-young, former chief of KORAIL, speaks during the groundbreaking ceremony for the Yongsan development project in 2011. (Yonhap)

The raid came as a part of the probe into alleged corruption surrounding the KORAIL-led project to develop the area near Yongsan railroad station in central Seoul into an international business district. The 31 trillion-won ($25.1 billion) scheme, the largest-ever development project in the nation’s history, was scrapped in the face of market slump in 2013.

“We can confirm that we stormed some places related to the project to obtain necessary material for the investigation,” the official said without providing details on the probe.

The prosecution opened the probe after a right-wing civic group filed a complaint against Huh accusing him of neglecting his duty and embezzling public money. In the process, prosecutors collected circumstantial evidence that Huh had helped the aide Sohn win business deals in the Yongsan project during his three-year term at KORAIL. In return, the aide allegedly set up slush funds for Huh who had then looked to run for parliamentary election.

Prosecutors are allegedly investigating whether Huh pressured Samsung C&T, then leader of the consortium of builders for the Yongsan project, to commission waste treatment to Sohn’s company. They also suspect Huh of wielding influence in selecting Lotte Tour as a new biggest shareholder for the project after Samsung gave up its stakes.

Prosecutors are also mulling over whether to call Huh in for questioning in the coming days.

Huh served as the nation’s police chief before serving as head of KORAIL from 2009 to 2011 during the previous Lee Myung-bak administration. He is now running for the second term as president of right-wing civic group Korea Freedom Federation.

By Ock Hyun-ju (