The key element of the Sung Woan-jong scandal, which has been battering Korean politics for more than one month, is that a tycoon, who once stepped into the world of politics, spent illicit money indiscriminately to buy influence from politicians and senior government officials.
As with similar scandals in the past, the case instantly brought public attention to the problems of corruption in politics and civil service, since those who are suspected of having received money from the late tycoon are all powerful people, including some of the closest associates of President Park Geun-hye.
But not to be ignored is the fact that Sung had no qualms about diverting company funds to create slush funds, which he used to bribe politicians and government officials. We emphasize this because corruption in the corporate world should be taken as seriously as that in the political community and the civil service.
Besides the Sung scandal, there are several cases that illustrate how crooked top executives of conglomerates are and how rotten Korean businesses have become.
Chang Sae-joo, the chairman of Dongkuk Steel Mill Co., is one of them. The tycoon was detained last week on suspicion of misappropriating about 20 billion won ($18 million) in company funds.
He is suspected of using the money to gamble in places like Las Vegas. It is incomprehensible that a man who runs the nation’s third-largest steel company could steal money from the company to use for gambling, for which he had already been convicted in 1990.
In 2004, he was found guilty of embezzling company funds for personal use including repaying his own debts. He was pardoned three years later.
We are certainly dealing with a fraudster and criminal, not an entrepreneur. That he even received a golf club membership as a kickback from a steel wholesaler leaves us speechless.
It would be strange if Dongkuk were to perform well under such an unethical, corrupt, mean chief. Dongkuk posted a loss of 300 billion last year, and it decided to sell its head office building in Seoul, which it bought less than five years ago. Chang put the company his grandfather founded 61 years ago in jeopardy.
If the crisis at Dongkuk can be blamed on a corrupt individual like Chang, corruption on a larger and broader scale is being uncovered at POSCO E&C, the construction arm of POSCO Group, the world’s fourth-largest steelmaker.
So far, four former and current executives of the firm have been detained on charges ranging from embezzlement and operating slush funds to taking kickbacks.
In one case, POSCO E&C executives in Vietnam allegedly conspired with local subcontractors to create slush funds amounting to 10 billion won ($9 million), part of which was funneled into Korea and some even into their own personal pockets.
Prosecutors also found that some executives managing projects at home and abroad made a habit of taking kickbacks amounting to tens of millions of won from subcontractors and suppliers.
The cases of Sung, Chang and POSCO E&C executives show that battling corruption in businesses is as important as fighting it in politics and civil service.
