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Ex-POSCO E&C executive put in custody on embezzlement charges

A Seoul court on Tuesday issued an arrest warrant for a former POSCO executive, allegedly engaging in embezzlement and creation of shady slush funds during a project in Vietnam, to take the suspect into custody.

Judges acknowledged the necessity of detaining the ex-POSCO Engineering & Construction executive, surnamed Park, for further investigation by prosecutors, according to the Seoul Central District Court.

The allegations raised by the prosecution involve that Park, 52, stashed away company funds worth 10 billion won ($9 million) at the builder’s Vietnamese operation during the former Lee Myung-bak administration.  

The prosecution, in particular, has highlighted the speculation that Park pocketed about 4 billion won of the 10 billion won funds between 2009 and 2012.

Park reportedly did not deny his embezzlement charges during the warrant hearing, which was held from 3 p.m. to 10 p.m. at the court on Tuesday.

While Park and POSCO E&C, a unit of steelmaking group POSCO, earlier argued that the funds were used as a rebate paid to the builder’s subcontractors, the prosecution has found evidence that a large portion of the money had been utilized elsewhere, according to investigators.

The investigative agency recently conducted a full-fledged probe into the case involving the slush fund scandal in Vietnam by raiding some of POSCO E&C’s subcontractors including Busan-based Heungwoo.

The prosecution, which arrested Park last Saturday without a warrant, sought the warrant for a custody purpose on Monday.

The Seoul District Prosecutors’ Office is expected to issue a summons on the conglomerate's former vice chairman Chung Dong-hwa, 64, and former chairman Chung Joon-yang, 67.

By Kim Yon-se (kys@heraldcorp.com)

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