Key lobbyist of Busan savings bank scandal faces questioning

Prosecutors are interrogating Park Tae-gyu, a 71-year-old lobbyist who allegedly peddled his political and economic influence to save the nation’s largest savings bank from suspension earlier this year.

All eyes are now on whether Park would name those who took bribes and other favors he had provided over the decades. His revelations could shake up the political scene, now gearing up for crucial elections such as the Oct. 26 by-elections for Seoul mayor, the April 11 general and the presidential elections of next December.

According to the Seoul Supreme Prosecutors’ Office, Park turned himself to investigators at the Incheon International Airport on Sunday five months after he fled to Canada to avoid the probe.

Park is accused of lobbying senior finance officials and politicians in a bid to prevent Busan Savings Bank from having its operations suspended. The bank was hit with a six-month suspension in February for its weak capital strength, causing substantial losses to its depositors.

Park is also said to have gotten Samsung Dream Scholarship Foundation and Pohang University of Science and Technology involved in raising a total of 100 billion won ($92 million) by issuing new shares, which eventually caused significant losses to the two.

Investigators said Park received more than 1.7 billion won from the savings bank in exchange for the strings of deals. He is assumed to have played a key role in saving the Busan bank from the temporary shutdown by making the most use of his personal network in financial administration, organizations and moreover, figures at the Presidential office. Prosecutors have secured statements that he had met top-tier financial regulators in Yeouido, Seoul several times.

A total of 56 people have been indicted in connection with the Busan savings bank scandal in the past six months and five affiliate companies of the bank have gone belly-up.

A total of 21 executives of the bank have been indicted or charged for arranging illegal loans and other deals. Powerful government figures such as Eun Jin-soo, former auditor of the Board of Audit and Inspection, Yoo Byung-tae, a former official at the Financial Supervisory Service, and several other former and incumbent officials have been indicted or interrogated for receiving kickbacks and attempted to protect the bank.

By Bae Ji-sook (baejisook@heraldcorp.com)