Prosecutors raided three subcontractors of POSCO Engineering & Construction Tuesday to look into their alleged involvement with the construction firm’s suspected slush fund creation.
The move came as prosecutors are widening their investigation into the allegation that POSCO E&C, the building arm of top steelmaker POSCO Co., stashed about 10 billion won ($8.9 million) in a slush fund through its overseas branch in Vietnam.
Prosecutors and investigators stormed into the three local firms suspected to have played a role in the fund formation, including construction firm Heungwoo Industrial Co. and confiscated their computer hard drives and other documents.
Heungwoo was a major business partner of POSCO E&C in the latter’s troubled Vietnam operations.
POSCO E&C allegedly kept the fund out of its books by inflating the amount to be paid to subcontract firms.
The head office of the builder was raided by prosecutors last week with a handful of officials undergoing prosecution interrogations.
The ongoing investigation is largely seen as zeroing in on former POSCO chief Chung Joon-yang, believed to have been in close relations with key officials under the previous Lee Myung-bak administration.
The probe also comes amid the government’s anti-corruption drive against public officials and businessmen, especially those who worked for the Lee administration.
Presiding over a Cabinet meeting on Tuesday, President Park Geun-hye called for stern measures to uproot endemic corruption across society.
Last week, Prime Minister Lee Wan-koo declared war on corruption, hinting at upcoming investigations into heavily-financed overseas resource development projects led under the former administration. (Yonhap)
