What the prosecution has found in its probe into the loan scam involving Moneual, a bankrupt home appliance maker, shows how vulnerable the nation’s export financing and bank loans are to mismanagement and corruption.
Prosecutors said last week that they had indicted the CEO and three other executives of the firm for receiving 3.4 trillion won in illegal bank loans based on fabricated exports records since 2007.
Also indicted, mainly on bribery charges, were 10 people from the Korea Trade Insurance Corp., Korea Export-Import Bank and the National Tax Service. They were charged with taking a total of 860 million won in kickbacks.
With the help of those corrupt officials, Moneual executives overstated the value of its overseas shipments ― they even made up hypothetical sales ― and used false papers to receive export credit guarantees and then bank loans.
As we suspected, the large-scale fraud would not have been possible without the help of corrupt officials of the export insurance and financing authorities like the KTIC and Eximbank.
The various ways the dirty money moved into the pockets of officials leave us speechless. Moneual executives put 50,000 won gift cards into cigarette packs, each of which contained cards worth 5 million won to 10 million won. They also offered bundles of 50,000 won bills and corporate cards. Some officials even took money through bank accounts of their relatives. There was a case in which Moneual executives spent as much as 12 million won in a single night on meals and entertainment.
These dirty connections enabled Moneual to disguise itself as an up-and-coming venture firm whose success even drew praise from Bill Gates and government recognition.
The Moneual case raises an urgent need for at least two actions: The government should make a comprehensive review of the export financing system and toughen in-house ethics rules at related public corporations and banks. At the same time, the National Assembly should pass the Kim Young-ran bill that contains the toughest-ever anticorruption rules for public officials as soon as possible. If not, there could be a second and third Moneual case.
