Prosecutors raid Kumho Petrochemical over slush fund

SEOUL, April 12 (Yonhap) -- Prosecutors raided the headquarters of the petrochemical unit of Kumho Asiana Group on Tuesday over allegations that the company had raised billions of won in slush funds, officials said.
Around 20 investigators confiscated accounting documents and computer drives from the head office of Korea Kumho Petrochemical Co. in downtown Seoul, according to the officials at the Seoul Southern District Prosecutors Office.
The company is suspected of having created the slush funds by paying more money than actual costs to subcontractors and receiving the difference, they said.
"We obtained circumstantial evidence showing Korea Kumho Petrochemical raised slush funds by embezzling company money," said a prosecution official. "But it's too early to mention the amount of the funds and who created them."
The company earned a record 363.5 billion won (US$332 million) in profit last year after chief executive Park Chan-koo, who stepped down in 2009 over a power struggle with his brothers, regained his post in March last year.
The Kumho Asiana Group, which is comprised of Kumho Industrial Co., Korea Kumho Petrochemical Co., Asiana Airlines Inc. and Kumho Tire Co., faced a severe credit crunch in late 2009 touched off by its purchase of major local builder Daewoo Engineering & Construction in 2006.
brk@yna.co.kr