By Na Jeong-ju, Cho Hyong-kwon
Staff Reporters

The Financial Supervisory Service (FSS) on Monday confirmed that Min Kyeong-chan, a brother-in-law of President Roh Moo-hyun’s elder brother, Roh Keon-pyeong, had raised 65.3 billion won from 47 individual investors without establishing a formal investment company or publicizing the purpose of investment.
Shin Hae-yong, chief of the asset management department at FSS, said that all of the 47 investors were individuals. He said Min had raised the money in two months since December last year through his unregistered investment company and without specifying where the actual fund would be invested.

``Min said he did not know who the investors were and claimed there was no formal contract between him and the investors. He said he planned to invest the money in real estate, venture firms and equities but did not provide details as to where the money would actually be invested,’’ Shin said.

However, the FSS said it could not find any illegalities linked to the mobilization of the fund since there was no legal violation in the process of mobilizing the fund. But under the current financial law, soliciting funds from investors without registration triggers criminal investigation.

``If there was a contract that specified a particular investment vehicle and the guarantee on the protection of the investment principal, then Min can be prosecuted for violating financial regulations. But we were unable to find any wrongdoings and therefore we do not plan to investigate further,’’ Shin said.

The opposition Grand National Party (GNP) chided the regulator for its cosmetic and superficial probe and urged the prosecution to initiate its own investigation. The minor opposition Millennium Democratic Party claimed on Monday it had secured evidence that a high-ranking official above the vice ministerial post was involved in the questionable mobilization of the fund. It will soon disclose details of the alleged fraud case at the National Assembly.

The police said they are probing the case to check out whether the 44-year-old doctor was involved in illegalities when he raised the money.

The police action came after Chong Wa Dae launched its internal investigation following a report that Min failed to pay back the money he borrowed from investors, allegedly citing his status as a relative of the president.

The National Police Agency (NPA) said it is gathering information to see if whether Min violated related laws. But the agency said it has yet to find law-breaking clues, adding it has no plan at present to expand the probe.

Min underwent a probe early last week for his involvement in a separate business fraud case, according to NPA officials. District health officials in Seoul accused Min of giving unauthorized prescriptions to patients when he ran an Internet-based health clinic sued min in 2000.

Presidential secretary for civil affairs Moon Jae-in said Chong Wa Dae would take the case over to the prosecution or the police if they find concrete evidence that Min had abused his connection to President Roh to raise the huge amount of money. But he said the presidential office has yet to receive any complaints from investors.

Chong Wa Dae officials said they had been looking into the allegation before it was reported by some media outlets and concluded that there was some wrongdoing connected to the fund raising.

They said they tried unsuccessfully to persuade Min to stop collecting money, and that he has continued to claim there are no illegalities in what he is doing.

In 2002, Min opened a hospital in Kimpo on the outskirts of western Seoul, with the funds he raised from investors. The seven-story hospital building, however, was seized recently and was put on auction after Min failed to pay debts.


kevincho@koreatimes.co.kr