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(LEAD) Prosecution raid sunken ferry operator, affiliates

All Headlines 14:37 April 23, 2014

(ATTN: RECASTS dateline, lead; UPDATES throughout with more info)

INCHEON, April 23 (Yonhap) -- Prosecutors raided offices of the operator of a sunken ferry, its affiliates and a related organization Wednesday as part of a widening probe into the cause of the disaster.

Investigators of the Incheon District Prosecutors' Office raided Cheonghaejin Marine Co, the Sewol's operator based in the coastal city, just west of Seoul, as well as some 20 offices of its affiliates and a religious group in Seoul believed to be related to the owner family.

It is part of the ongoing investigation into what caused last week's deadly sinking of the ferry, the country's worst maritime disaster in 20 years. Of 476 people on board, 174 people survived the sinking, and 150 have been confirmed dead, with 152 people still missing as of noon on Wednesday.

The residence of Sewol's owner Yoo Byung-eun, a former chief of Semo Marine Co., in Seoul was also raided. Yoo is suspected of a breach of trust, embezzlement, foreign exchange trading and tax evasion, among others.

The investigators said they obtained computer hard disks and several documents such as accounting books to corroborate the charges.

"The focus of the probe will be to see if the owner family has accumulated huge wealth by embezzling corporate funds while failing to fulfill its duty of properly managing the companies," a prosecutor said. "Tracing their hidden assets is also needed to pay damages to the victims and their families."

While establishing 13 overseas affiliates, along with another 13 domestic ones, the owner family was found to increase its fortune to over 240 billion won (US$230.8 million), with more assets expected to be hidden.

The debt-ridden Cheonghaejin Marine is virtually a successor to Semo Marine, which went bankrupt in 1997, hit by a series of scandals, including a sinking of its cruise boat.

Cheonghaejin was set up in 1999 by taking over ships and assets held by Semo Marine's affiliate. Yoo's two sons control Cheonghaejin through a cobweb-like ownership structure.

After analyzing the confiscated data, the prosecution is planning to summon Yoo and his family members as well as affiliates' officials. They have already been banned from leaving the country.

<YNAPHOTO path='C:/YNA/YNACLI~1/Down/Article/AEN20140423003451315_02_i.jpg' id='' title='' caption='This is the office of Cheonghaejin Marine Co., the operator of the ship Sewol that sank in waters off South Korea&apos;s southwestern town of Jindo on April 16, 2014. (Yonhap file photo) '/>

The joint team of prosecutors and police officers also widened their probe into the deadly sinking by questioning more relevant officials and crew members to learn what caused the tragedy.

So far, seven crew members who survived the sinking were arrested, including the captain Lee Joon-seok, who is accused of abandoning his passengers, mostly high school students on a field trip.

The court also issued warrants to arrest three more crew members of the doomed ferry, including two assistant steersmen, for their failure to do their maintenance and repair job and a safety check.

While a faster than usual turn is believed to be a major cause of the accident, the investigators said they are open to every possibility, including mechanical problems, poor driving by novice crewmen, structural problems due to changes of the ship's structure and overloading.

An inexperienced third mate in her 20s commanded the ship while the captain had gone to his bedroom. The 20-year-old ferry was loaded with 3,608 tons of cargo, though experts say it should have carried 987 tons, around three-and-a-half times less weight, to maintain its balance. The ship, however, was legally allowed to carry 6,825 tons.

The investigators said they also have been analyzing text messages of crew members and surviving passengers and relevant data to learn exactly what was happening at the time of its sinking and how crew members were dealing with the emergency situation. All 15 crewmen in charge of driving the ship survived the disaster, as they escaped the capsized boat through a passage reserved for them.

The prosecution in the southern port city of Busan, meanwhile, launched a full-scale investigation into the overall maritime industry, as well as the entity in charge of the safety inspection of vessels.

The Korean Register of Shipping (KR), a non-profit organization in charge of inspecting and certifying vessels on behalf of the government, is under an intensive probe.

The KR approved the Sewol for operation in February after doing a safety check on more than 200 items.

"We are looking into any illegality over the course of its inspection into and certification of the ship operators," a Busan prosecutor said.


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