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(3rd LD) Prosecutors to question sunken ferry's suspected owner

All Headlines 20:22 May 13, 2014

(ATTN: UPDATES with latest arrests in final 4 paras)

INCHEON, May 13 (Yonhap) -- Prosecutors said Tuesday they will summon the de facto owner of a sunken ferry later this week for questioning over alleged corruption by the owner family.

Yoo Byung-eun, suspected to be the owner of the Sewol's operator, Chonghaejin Marine Co., has been told to show up at the Incheon District Prosecutors' Office by 10 a.m. on Friday, they said.

The 73-year-old will be questioned as a suspect in the case, they added.

"It is a citizen's duty to comply with a prosecutor's legitimate demand for appearance," a prosecution official said. "It's quite surprising that his offspring disappeared, but we expect he will show up given his social position."

Prosecutors said they plan to seek an arrest warrant or take other measures to detain him if he refuses to accept the request without giving any reason.

A team of prosecutors in this western port city have expanded their investigation into corruption allegations surrounding the Yoo family since the 6,825-ton Sewol capsized and sank off the southwest coast with an estimated 476 people aboard on April 16. A total of 276 people have been found dead, and 28 others remain missing.

Yoo -- a businessman, artist, ex-convict and religious figure -- may face a host of corruption charges, including embezzlement, dereliction of duty, tax evasion and bribery, according to prosecutors. They suspect he controls Chonghaejin Marine through two of his sons, who own stakes in the firm through various subsidiaries.

However, his close aides have so far denied his involvement in the management of Chonghaejin Marine and a dozen other affiliates, saying that he does not have any stake in them.

The prosecution suspects that the Yoo family established three paper companies to create slush funds and illegally transfer money abroad by embezzling corporate funds while failing to fulfill the duty of properly managing the companies.

A pay roll secured also indicates that Yoo received pay worth 15 million won (US$14,000) a month as the chairman of the shipping company, prosecutors said.

The summons came hours after prosecutors began efforts to execute a court-issued warrant to detain Yoo's eldest son after he disobeyed a prosecution summons.

A team of prosecutors and investigators visited Yoo Dae-kyun's home in southern Seoul to arrest him for questioning over his role in the sinking of the ferry Sewol and the corruption allegations, but he was not there, prosecutors said.

The Incheon District Court on Monday issued the arrest warrant for the 44-year-old Yoo after he failed to appear before prosecutors in the morning. The court cited fears that he may flee.

The younger Yoo is the biggest shareholder of four affiliates, including I-One-I Holdings, which is Chonghaejin's parent company, prosecutors said.

Prosecutors have already sought arrest warrants for Yoo's second son, Hyuk-ki, and eldest daughter, Som-na, both currently staying abroad, as they have repeatedly refused to respond to prosecution summonses.

Later on Tuesday, prosecutors arrested Lee Kang-se, the former chief of Ahae Corp., a paint manufacturing company owned by Yoo Byung-eun, for allegedly aiding the Yoo family's embezzlement and other illegalities. The Incheon District Court, in granting the prosecution's request for an arrest warrant, cited fears that Lee may flee and destroy evidence.

Lee allegedly made an investment in an overseas company set up by Yoo to support the tycoon's activities as a photographer. Lee is under suspicion of purchasing photographs from Yoo and also paying large sums of money to a paper company owned by Yoo's family for unconfirmed consulting services, according to prosecutors.

Also on Tuesday, prosecutors arrested two vessel safety managers on charges of falsifying a mandatory safety inspections form for the Sewol.

The two managers of the Korea Shipping Association, whose identities were withheld, didn't conduct a safety check before the ill-fated ferry departed from the western port of Incheon the night before the accident. They allegedly filled out the inspection form based on information relayed verbally to them by the ferry's captain after it had left the port.


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