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Watchdog widens probe in all affiliates of Sewol operator

All Headlines 14:02 April 25, 2014

SEOUL, April 25 (Yonhap) -- The South Korean financial watchdog is widening its special probe to include all parties in the labyrinthian link of companies and their affiliates that had a hand in operating the ill-fated ferry, while the investigation was unveiling a former businessman with a questionable past and wealth shielded from public scrutiny.

The Financial Supervisory Service (FSS) has been looking into details of overseas transactions and other money activities by the ferry operator Cheonghaejin Marine Co. and Yoo Byung-eun, a former chief of Semo Marine Co. that was the predecessor of the operator, as well as his two sons.

According to the officials, the watchdog is including Cheonghaejin Marine's parent company, I-One-I Holdings Co., and other affiliated companies in investigating cross-border transactions.

"We decided to look into all companies and people involved in the Sewol and its operator," said an FSS official.

Along with the FSS, the national tax agency and customs bureau are looking at possible tax evasion and illegal overseas investments.

The 6,825-ton Sewol sank on April 16 while heading to the southern resort island of Jeju from the country's western port, carrying hundreds of high school students on a field trip. The death toll has exceeded 180, with some 120 people still missing. Around 476 people are believed to have been aboard the vessel.

As the country was tracking down people and the failed system responsible for the disaster, investigators were led to Yoo and his family who controlled the ferry operator Cheonghaejin Marine through stakes connected through a series of affiliates.

Yoo's first son Dae-kyun holds a majority stake in door-to-door sale company Dapanda Co. and Chonghaejin Marine, while his second son Hyuck-ki owns some 10 percent stake in Ahae Corp., a paint manufacturing company, and Ahae Press Corp.

At the same time, the two children are the biggest shareholders of I-One-I Holdings, which owns stakes in Chonhaiji, a shipbuilding unit, which in turn owns about 40 percent of the ferry operator Cheonghaejin Marine.

The watchdog believes that this cross-web investment circle helped the family manage and control the entire group of companies, some of which are being blamed for the deadly sinking of Sewol.

Yoo and his family are estimated to own at least 240 billion won in assets such as stocks and properties as well as a number of assets in foreign countries, including five mansions and luxury apartments in the United States.

I-One-I Holdings is known to have at least 13 unlisted firms under its wings, with tens of overseas units in the U.S., France, Hong Kong and other countries.

Yoo's eccentricities have also been a fodder to the media amid public outrage at the family's link to the ferry operator.

Yoo and his father-in-law established the Evangelical Baptist Church (EBC) in 1962, regarded as unorthodox by the Christian community. Thirty-two members of the church who believed in doomsday committed group suicide in 1987 under mysterious circumstances. Yoo was convicted on fraud charges and served a prison term but was cleared of any wrongdoings in connection with the suicides.

After retirement, Yoo, now in his 70s, turned to professional photography under an alias "Ahae." He held exhibitions in the U.S. and at the Versailles in France, earning him the title "reclusive billionaire photographer from South Korea" by overseas media.

Yoo has said through his attorney earlier this week that he shares the responsibility for the Sewol accident, but refuted all allegations of illegal transaction and tax evasion.


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