Prosecutors indict head of real estate firm on embezzlement charges

SEOUL, Nov. 3 (Yonhap) -- Prosecutors indicted on Monday the head of a
development company who allegedly incurred some 80 billion won (US$62 million) in losses to his company, charging him with embezzlement and breach of trust.

Prime Group CEO Baek Jong-heon, 56, is suspected of using company funds for
personal investments in 2003 and misappropriating 40 billion won by disguising it
as loans for stockholders, executives and workers, according to investigators.
The prosecution is also looking into whether company slush funds were used for
political lobbying, suspecting that Baek asked politicians to help his business
mergers and acquisitions over the past decade.
Baek was responsible for another 40 billion-won loss to the firm in the so-called
modified leverage buyout of Dong Ah Construction in 2006, which he financed with
Dong Ah's own funds after first taking over the firm on paper.
Prime Development, a leading company of Prime Group, is involved in real estate
and owns 43 companies as subsidiaries, including electronics market Techno Mart,
Korea's well-known document application software maker Haansoft, Prime Bank, and
Dong Ah Construction.
Prosecutors searched the group's affiliates after taking Baek into custody on
charges of embezzlement and breach of trust on Oct. 16.
"The charges in the indictment are same as those in the arrest warrant," said an
official of Seoul Western District Prosecutors' Office.
brk@yna.co.kr
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