By Kim Cheong-won
Staff Reporter


Park Yong-sung, former chairman of Doosan Group, and his three brothers were Thursday indicted for allegedly embezzling about 32.6 billion won ($31.1 million) in company funds over the past 10 years.

The prosecution, however, has decided not to detain the four along with 10 other Doosan executives, touching off strong public protest over its failure to confront businesses engaging in accounting fraud and slush funds.

Yong-sung and his two brothers _ Yong-oh and Yong-maan _ are suspected of manipulating the accounting records at Doosan Industrial Development and Donghyun Engineering from 1995 until recently to raise a total of 28.6 billion won in slush funds.

Doosan Industrial Development is a de facto holding company of the nation’s 10th largest business group, and Donghyun Engineering is its construction subsidiary.

Park Yong-wook, the family’s sixth son, is charged with embezzling 3.98 billion won from the group’s affiliate Nefs Co. from 1998.

The prosecution said the slush funds raised by the companies were used for the suspects’ private purposes.

Investigators said that arresting the former chairman and other key family members would have a negative impact on South Korea’s international image and credibility, and further destabilize business operations of the already embattled Doosan Group.

Park Yong-sung, who was accused by his elder brother Yong-oh of misusing corporate funds after he took over the Doosan chairmanship from him, is a member of the International Olympic Committee. He also leads the International Judo Federation and heads the International Chamber of Commerce.

The prosecution has also decided to take a lenient stance on the Doosan family, after Yong-sung and Yong-maan resigned from their posts last Friday, drawing strong criticism for being too lenient toward the family-controlled conglomerate.

Rep. Shim Sang-jung of the Democratic Labor Party (DLP), criticized the prosecution’s decision as an act that runs counter to the nation’s justice system.

``This is the typical chaebol corruption case in which the owner made up slush funds himself and used it for pocket money. The leniency with which the Doosan owner families were treated is expected to further compel the prosecution to indict suspected wrongdoers without physical detention, despite their apparent violation of pertinent law,’’ she said.

She went on to say that she doesn’t understand why the prosecution, which recently resisted the Justice Minister’s order to investigate a professor who allegedly made pro-North Korean remarks without physical detention, changed their attitudes when it comes to investigating the conglomerates.

``Equality before the law should be preserved and conglomerates should bring management transparency up to global standards to drive out any irregularities once and for all,’’ she added.

The scandal erupted in late July when Yong-oh filed a complaint with the prosecution following his exit from Doosan’s head post.

Yong-sung was then elected the group’s new chairman of the board at a directors meeting but his brother refused to step down, demanding that Doosan Industrial Development be run by his sons.

kcw@koreatimes.co.kr