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Prosecutors seek arrest warrants for ferry owner's aides

All Headlines 20:41 May 07, 2014

(ATTN: UPDATES with prosecution's request for arrest warrants in first seven paras)

INCHEON, May 7 (Yonhap) -- Prosecutors said on Wednesday they have requested arrest warrants for two close aides of the de-facto owner of the sunken ferry Sewol as part of their expanded probe into multiple corruption allegations surrounding the owner family.

Prosecutors suspect the two -- Go Chang-hwan, head of Semo Group, and Byeon Ki-choon, head of Semo's shipbuilding unit Chonhaiji -- inflicted losses on their firms to help the owner family create slush funds.

They are deemed close aides of Yoo Byung-eun, the former chairman of Semo Group who is suspected of being the de facto owner of Chonghaejin Marine Co. Chonghaejin Marine operated the Sewol that sank off the country's southwest coast on April 16, leaving 302 people dead or missing.

The move came as the prosecution stepped up its probe into Yoo and his family for allegedly accumulating huge wealth by embezzling corporate funds, breach of duty and evading tax.

Go and Byeon are suspected of causing tens of billions of won (tens of millions of dollars) in losses to their companies by paying large sums of company funds to purchase photographs by Yoo at excessively high prices and for consulting services from a paper company owned by Yoo's family.

Also as part of their probe into the owner family, prosecutors on Wednesday called in Lee Kang-se, the former chief of Ahae Corp., a painting manufacturing company owned by Yoo, once again for questioning into his alleged involvement in the family's illegalities.

Lee was first quizzed last Wednesday on suspicions that he made an investment in an overseas company set up by Yoo to support the tycoon's activities as a photographer. He allegedly paid 100 million won (US$97,799) to buy eight photographs from Yoo. Ahae is an alias used in Yoo's artistic endeavors.

Lee was also suspected of paying large sums of money to a paper company owned by Yoo's family for unconfirmed consulting services, according to the prosecutors.

The investigators also said they are trying to summon Yoo's second son, Hyuk-gi, and two other close aides in case they fail to appear by Thursday for questioning by the prosecution.

"We expect them to come here by the deadline," a prosecutor said. "But we have been in close cooperation with the U.S. Federal Bureau of Investigation as well as the Homeland Security Investigations on ways to forcibly bring them home in that case," he added.

The junior Yoo is suspected of keeping the bulk of the suspected slush funds in overseas accounts.

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