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Prosecution raids Kumho Petrochemical over slush fund

The prosecution Tuesday raided Kumho Petrochemical headquarters and offices of its business partners to look for proof of alleged embezzlement to create slush funds.

Investigators from the Seoul Southern Prosecutors’ Office seized hard disks containing accounting information.

“We have found circumstantial evidence that Kumho Petrochemical misappropriated company money to amass slush funds, but it is too early to talk about who is behind it or the size of the secret funds,” a prosecutor probing the case said.

The prosecution has found traces of Kumho paying more than it was charged to its subcontractors and then getting the excess amount back to amass the secret funds.

A Kumho Petrochemical official said the company was still trying to find out why the prosecution raided its headquarters.

Kumho Petrochemical posted its highest-ever operating profit of 363.5 billion won last year after chief executive Park Chan-koo returned to top management in March last year. Park had been ousted in 2009 by his brother, Kumho Asiana Group chairman Park Sam-koo, in a battle over control of the business giant.

Park Chan-koo has been trying to legally separate Kumho Petrochemical from Kumho Asiana Group, a conglomerate with Asiana Airlines and Kumho Tire under its wing.

By Kim So-hyun (sophie@heraldcorp.com)
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