NATIONAL

Arrest warrant sought for operator of Cho Kuk family’s fund

By Ock Hyun-ju
  • Published : Sept 9, 2019 - 12:45
  • Updated : Sept 11, 2019 - 11:43

The prosecution on Monday sought an arrest warrant for the operator of a private equity fund in which embattled Justice Minister Cho Kuk’s family had invested, as part of a widening probe into corruption allegations involving Cho and his family.

(Yonhap)

President Moon Jae-in appointed Cho as justice minister, giving him control over the prosecution, on the same day -- even as the prosecution investigates allegations that his family made dubious investments and his daughter received special favors in university admission.

The Seoul Central Prosecutors’ Office requested an arrest warrant for the CEO of private equity firm Co-Link Private Equity, surnamed Lee, as well as the head of local firm Wealth C&T, surnamed Choi, who received funding from Co-Link PE.

Lee faces charges of embezzlement and destruction of evidence, among others. He is the operator of a private equity fund in which Cho’s wife, Chung Kyung-shim, their two children and other relatives had invested about 1.4 billion won ($1.17 million).

Lee, who was summoned for questioning last week, is also suspected of having exaggerated the amount of the investment he received from Cho’s wife and children. He is alleged to have falsely reported to financial authorities that the fund had received 7.4 billion won from Cho’s family when the actual amount was 1.5 billion won.

Cho has denied his family’s involvement in operating the fund.

Choi, who runs Wealth C&T, a company that manufactures lamppost switches, is suspected of having misappropriated some 1 billion won in company funds.

The private equity fund in which Cho’s family had invested put its money mostly into Choi’s company. The company allegedly won a series of projects following the investment, with its sales rising 74 percent in a year. At the time, Cho was serving as senior secretary to the president for civil affairs.

The hearings on whether to arrest Lee and Choi are set to be held Wednesday.

New allegations continued to be raised against Cho’s wife on Monday via local media.

Chung had allegedly been paid about 14 million won between December last year and June this year by WFM, which had been headed by Lee until the prosecution opened a probe into him. Chung said she had been paid for giving the firm business advice.

Chung also allegedly tried to destroy evidence by moving documents related to the ongoing investigation, which she denied.

The prosecution is said be planning to summon Chung for questioning to investigate the extent of her involvement in investing in the fund.

The prosecution on Friday filed charges against Cho’s wife, a professor at Dongyang University, on suspicion she forged a university certificate in 2012 for her 28-year-old daughter to help her gain admission to a medical school in 2014.

Dongyang University’s fact-finding team, meanwhile, held a press conference Monday where it said that it had failed to verify facts surrounding Chung’s alleged fabrication of the certificate. Chung’s employment status will be decided upon the conclusion of the prosecutorial probe, it added.

It is the first time a family member of a sitting justice minister has come under prosecution investigation.

At his parliamentary confirmation hearing Friday, Cho said he would not be briefed on the status of the prosecutorial probe of his family.

By Ock Hyun-ju (laeticia.ock@heraldcorp.com)