Incheon prosecutors on Sunday questioned a brother and close aide of Yoo Byung-eon, de facto owner of the sunken ferry Sewol, tightening the net around the scandals involving the owner family.

Yoo Byung-il, the older brother of the former Semo Group chairman, was to be investigated for allegedly embezzling funds from the ferry’s operator, Chonghaejin Marine Co.

Yoo’s brother is believed to have received consultation fees of about 3 million won ($2,924) from Chonghaejin Marine Co., while Yoo himself received 15 million won. Prosecutor will see if Yoo Byung-il received any other payments from the owner family’s affiliates.

The investigation is also focusing on proving that the Yoos were directly involved in the affiliates’ management. Prosecutors said they have secured testimonies that the chairman’s elder brother had illegally intervened in the company’s management, and also gave advice on the ship’s possibly illegal remodeling.

Prosecutors found evidence proving that the chairman’s oldest son, Dae-gyun, received monthly wages from affiliates that he did not own shares of. They ordered the son to appear for questioning on Monday.

Yoo Byung-il’s summoning marked the first time a member of the owner family has been brought in for questioning during the investigators’ corruption probe. The Yoos, believed to have siphoned off billions of won from their affiliates, have been eluding the prosecution’s summons since the probe kicked off last month.

The authorities have issued an arrest warrant for the chairman’s second son and daughter, who had been snubbing the questioning.

With the investigation into the family taking off, observers are saying the chairman himself is likely to be summoned within this week.

While closing in on the owner family, the prosecutors also continued to grill their close aides.

Chae Gyu-jeong, the head of Semo-affiliate Onzigoo Co. since 2008, was summoned Sunday. He was to be questioned for supposedly inflicting losses on his own company to help Yoo’s family create a slush fund.

Chae, a former vice governor of North Jeolla Province, is believed to have used his political connections to act as a lobbyist for the Yoos.

On Saturday, the investigators interrogated actress Jeon Yang-ja, suspected to be in Yoo’s inner circle. The 72-year-old, who is a member of a loosely Christian cult connected to Yoo, was questioned over her alleged role in helping the billionaire stash illegal funds.

Since the Sewol’s sinking on April 16 off the country’s southwestern coast, the joint police-prosecution investigation team found that Yoo, his family and his close associates may be involved in series of criminal activities including tax evasion, illegal real estate transactions and violating foreign exchange laws when transferring large sums out of the country.

As the probe went on, the ruling and opposition parties agreed to convene a special parliamentary session this month to discuss the follow-up measures for the deadly ferry sinking. Early Sunday, President Park Geun-hye held an emergency secretariat meeting to discuss matters related to the Sewol incident.

As of Sunday, bad weather hampered the search operation for the 29 passengers who went missing in the Sewol’s sinking for the second day.

The 6,825-ton ferry Sewol was carrying an estimated 476 passengers when it capsized and sank off the southwestern island of Jindo. A total of 172 were rescued but 275 people were confirmed dead, most of whom were high school students on a field trip.

By Yoon Min-sik (minsikyoon@heraldcorp.com)

* Pursuant to an order by the Press Arbitration Commission, we have been asked to publish the following statement from the Evangelical Baptist Church (EBC).

 

 

Evangelical Baptist Church (“EBC,” the “Salvation Group”*) and Mr. Yoo Byung-eun Related Corrections and Official Statement by EBC

 

After the April 16, 2014 Sewol ferry tragedy, the media published a flood of indiscriminate articles regarding the EBC (also known as Guwonpa* in Korean) and Mr. Yoo Byung-eun. Due to the immense volume of articles, it is impossible to correct and counter every single one. Therefore, in agreement with the EBC and the surviving family of Mr. Yoo Byung-eun, we are publishing the following combined corrections and Official Statement by EBC.

 

* This label, which is translated as the Salvation Group, has been applied disparagingly to the Evangelical Baptist Church

1. In regards to the claims that Mr. Yoo Byung-eun was the owner of the Sewol ferry vessel and the owner and Chief Executive Officer of Chonghaejin Marine Ltd (“Chonghaejin”) and its affiliated companies

 

The majority of the media reported that, as the owner of the Sewol ferry, Mr. Yoo Byung-eun directly managed Chonghaejin and its affiliated companies and that he used operating funds for personal purposes. However, Mr. Yoo retired from his executive management position in 1997. He did not own any shares in the noted companies, nor had he managed operations, nor used the operating funds for personal reasons. He was not the owner of the Sewol ferry, nor the Chief Executive Officer of Chonghaejin. As such, he had not provided any directives in regards to the overloading of the Sewol ferry or its renovation (e.g. expansion of the cabins and cargo area).  

 

2. In regards to the reports of Mr. Yoo Byung-eun’s accumulation of illicit funds and lobbying of lawmakers

 

Although some media outlets reported that Mr. Yoo Byung-eun had established favorable relationships by paying bribes to politicians, Korean Prosecutors’ Office verified last October that reports of such bribery activity were false. We hereby correct all articles pertaining to this matter.

 

3. In regards to the allegations of Mr. Yoo Byung-eun’s asset holdings in other people’s names and misappropriation of offerings made to the EBC

 

The majority of the media reported that Mr. Yoo Byung-eun was a wealthy billionaire who owned real estate properties, including Geumsuwon, both in Korea and abroad under other people’s names and that he diverted the tithes and offerings made to the EBC to an illicit fund and expanded his businesses.

 

The EBC has confirmed that reports of his wealth incorrectly included real estate properties owned by farming associations, which had been established by church members. Thus, these reported properties were not held by Mr. Yoo Byung-eun in another person’s name, but are owned by the noted farming associations.

 

Additionally, Mr. Yoo did not embezzle from the EBC nor did he expand his businesses by diverting tithes or offerings of the pertaining church and its members into an illicit fund.

 

4. In regards to the reports related to Mr. Yoo Byung-eun’s position within the EBC

 

The EBC has stated that Mr. Yoo Byung-eun was not a religious sect leader. Although he was ordained as a pastor in the 1970s by missionaries at the Far East Broadcasting Company, he did not serve as a pastor. There is no pastor in the EBC, since it is a congregation of laymen.

 

It was also verified that Mr. Yoo Byung-eun did not participate in the official

process to register EBC as a church in 1981, nor had he been revered as a religious sect leader or been made into a God-like figure by the pertaining church or its members.

 

5. In regards to reports that the EBC is a cult and that it has false doctrines

 

The majority of the media reported that the EBC is a religious cult and that it preaches doctrines that are not consistent with Christianity. There are certain churches in Korea that call the EBC a cult, solely based on differences between their and the EBC’s doctrines. However, the EBC has affirmed its belief in the Bible, the Trinity, Jesus’ conception by the Holy Spirit, His birth, death, and resurrection. The EBC does not worship a particular individual as a religious sect leader or preach any doctrine that contradicts the Bible.

 

6. In regards to reports that Lee Yong-wook, a senior Coast Guard official, and the Sewol ferry crew, including Captain Lee Jun-seok, are members of the EBC, and that the EBC managed Chonghaejin

 

It was verified that the captain and the crew members who abandoned the ship at the time of the Sewol ferry accident are not members of the EBC. Only two people have been confirmed as members of the EBC: the late Jeong Hyun-seon, who died while evacuating passengers and thus was designated a national hero, and another person, who had been rescuing passengers and was himself later rescued in an unconscious state. It has also been verified that the EBC does not own any shares of Chonghaejin and that it did not engage in its management. Furthermore, the EBC has stated that Lee Yong-wook, a senior Coast Guard official, has not attended the EBC for the past 15 years.

 

7. In regards to reports of Mr. Yoo Byung-eun’s attempt to flee the country by ship, reports of his seeking asylum and reports of his possession of firearms

 

The majority of the media reported that Mr. Yoo Byung-eun attempted to flee the country by ship, that he requested asylum in several countries but was rejected, and that he possessed firearms to protect himself. The prosecutors hastily announced without confirming the facts that Mr. Yoo Byung-eun attempted to seek asylum. However, two months later on August 18, the prosecutors revised their statement noting that “upon investigation into the identity of the caller, a person with no relation to the Salvation Group had placed a prank call.” In addition, there was no evidence of any attempt by Mr. Yoo to flee the country. It has also been confirmed that the firearms alleged to be in his possession were collectibles. Furthermore, not only were they collectibles that could not be operated they were also not in his possession while he was fleeing.

 

8. In regards to reports on allegations about the EBC’s and Mr. Yoo Byung-eun’s links to the Odaeyang incident and their relationship with the Fifth Republic of Korea

 

Some news articles created the impression that the EBC and Mr. Yoo Byung-eun were behind the Odaeyang mass suicide incident. Some also reported that Mr. Yoo Byung-eun had been able to rapidly grow the Semo Group in the 1980s (e.g. securing the business rights to operate the Han River Ferry Cruise) by using a connection with Mr. Chun Kyung-hwan and a close relationship with the former President Chun Doo-hwan’s Fifth Republic of Korea. However, the Odaeyang mass suicide incident was thoroughly investigated by the prosecution and the police three times—in 1987, 1989, and 1991. All three investigations concluded that the EBC and Mr. Yoo Byung-eun had no connection to the incident. Also, neither Mr. Yoo Byung-eun nor the EBC had any collusive ties with the Fifth Republic of Korea. All of this was verified in the official document issued from the Incheon District Prosecutors’ Office on May 21, 2014.

 

9. In regards to reports alleging that Mr. Yoo Byung-eun held photography exhibitions at the world’s top museums by donating funds and that he coerced purchases of his artworks

 

The artwork of Ahae (Mr. Yoo Byung-eun) was examined and authorized for exhibitions at renowned museums and exhibition sites in the United States and Europe by their screening committees. The exhibitions were unrelated to donations, and it was confirmed that there was no causal relationship between Ahae’s donation history and the exhibitions. Moreover, Mr. Yoo’s photography exhibitions were authorized by the committees after the directors of the respective museums had acknowledged the artistic value of Ahae’s works and subsequently proposed hosting the exhibitions. It has been confirmed that the exhibitions were not a result of Mr. Yoo’s patronage or donation. Additionally, the above museums have verified that an exhibition can never be authorized unless the artistic value of an artist’s works is recognized by the screening committee, irrespective of the amount of money an artist donates.

Additionally, it was reported that Mr. Yoo coerced Chonghaejin and its affiliates to purchase his photos at inflated prices. However, this has been confirmed to be false.

 

Lastly, the Evangelical Baptist Church has released the following statement to the media:

 

“We sincerely request of the press to serve the public’s right to know with objective and balanced reporting, guarding against biased arguments from its interviewees, all the while fulfilling its duty and responsibility to create no victims from such reporting.

 

We ask the press to reflect upon its manner of reporting on the Sewol ferry accident. Without waiting for the truth to be revealed through the completion of the investigative and judicial process, the reporting largely focused on releasing exclusive and sensational news reports, which led to misleading the public and essentially conducting a trial in the court of public opinion. We also ask the press to avoid compromising the democratic principles of a constitutional state and to prudently take strict precautions against those forces that aim to take advantage of this period of heartbreak for this nation in order to advance their own position and authority.”