The Korea Herald


Ex-chairman of POSCO to face summons

By 옥현주

Published : Aug. 31, 2015 - 19:05

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The prosecution will summon former POSCO chairman Chung Joon-yang for questioning this week as part of the ongoing probe into alleged corruption involving the nation’s No. 1 steelmaker and its affiliates.

Prosecutors said Monday they are looking at the schedule to call in the 67-year-old chairman for questioning.

(Yonhap) (Yonhap)

The summon comes six months after the prosecution launched its probe into POSCO’s alleged corruption cases including suspicious mergers and acquisitions, tax evasion and setting up slush funds.

Chung is suspected of masterminding dubious M&A deals during his term as chairman between 2009 and 2014, which allegedly caused great financial loss to POSCO. The most controversial case involves Sungin Geotec, from which POSCO purchased shares in 2010 well over market value.

Chung will also be questioned whether he played a role in giving Dongyang Construction overseas projects initiated by POSCO during his term. The prosecution suspects the subcontractor of having created slush funds for the steelmaker and its affiliates in return for the deals.

Chung also allegedly exerted undue influence in getting his relative a job as a high-level official at Kosteel, a partner company of POSCO. Kosteel has been suspected of helping POSCO evade taxes by doctoring transaction records and creating slush funds.

If the allegations are proven to be true, he could face breach-of-duty charges.

An official from the prosecution said that Chung could be summoned for one more grilling session given the amount of evidence and testimonies to look into.

The probe has dragged on as the court rejected prosecutors’ multiple requests for arrest warrants for former POSCO vice chairman Chung Dong-hwa and Bae Sung-ro, ex-chairman of Dongyang Constructions.

The probe into POSCO came in line with the prosecution’s widening investigation into the former Lee Myung-bak administration’s “energy diplomacy,” which encouraged Korean companies to take part in overseas projects to secure energy resources. But the resource drive has faced criticism for allegedly wasting taxpayers’ money, with some funds thought to be lost in corruption.

By Ock Hyun-ju (