Kurdish politician Fouad Massoum named president of Iraq

Ex-STX Group chief questioned over graft

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Published : 2014-04-04 21:07
Updated : 2014-04-04 21:07

The former head of financially troubled shipping and shipbuilding conglomerate STX Group was called in by prosecutors Friday to face questioning over alleged embezzlement and business malpractice.

Kang Duk-soo, who headed the group between 2003 and February 2014, appeared at the Seoul Central District Prosecutors’ Office in southern Seoul around 9:20 a.m. to undergo questioning as a suspect in the corruption case.

“I apologize for causing the people to worry, and I will sincerely respond to the investigation,” the embattled former tycoon told reporters before entering the prosecutors’ office.

Kang allegedly funneled the funds of STX Heavy Industries Co., a troubled shipbuilder unit, to illegally support other ailing affiliates, inflicting losses of nearly 300 billion won ($280 million) to the group, prosecutors said.

Prosecutors further alleged that the 64-year-old former chairman personally used the company funds to bribe politicians while heading the group.

“I did not have any time to (bribe politician) as there were many overseas trips,” Kang said.

Kang is facing multiple charges including accounting fraud, embezzlement and dereliction of duty, prosecutors said.

“The primary goal of the investigation is to delve into management problems,” a prosecutor close to the investigation said, adding that an investigation into the graft allegation will be launched later.

A prosecution investigation into Kang was launched after the company filed a complaint against the group’s five former executives, including Kang. The prosecutors’ office has since raided the offices of STX Group and its affiliates.

STX Group, once the country’s 13th-biggest conglomerate with a total of 10 affiliates under its wing, has seen its major affiliates struggle from liquidity shortages and mounting debt due to the downturn in the shipbuilding and shipping sectors.

Kang, who began his career as a salaried worker at a cement company, expanded STX Group into one of the country’s biggest conglomerates through corporate mergers and acquisitions (M&A). He, however, resigned from the top post in February 2014, saying that he would take responsibility for the mismanagement. (Yonhap)

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