Prosecution raids builders over slush fund concerning river project

Prosecutors said Sunday they have raided the offices of two affiliates of Dohwa Engineering Co. Ltd. as part of their probe into allegations that the major civil engineering firm created huge slush funds while participating in a project to refurbish the country's four major rivers.

Dohwa Engineering is accused of amassing secret funds worth nearly 93 billion won (US$83.52 million) at the behest of its imprisoned chairman while contracted to provide engineering services in the controversial mega-budget project in 2009, prosecutors said.

The 22.2 trillion won (US$19.8 billion) project, pushed by the former Lee Myung-bak administration, was completed last year amid mounting criticism over its economic viability and negative environmental impact.  

With a court-issued warrant, a team of prosecutors seized computer hard drives and documents from the offices of Kunhwa Engineering & Consulting and Hanzo Construction, prosecutors said, without giving further details.

The raid comes after Dohwa Engineering Chairman Kim Young-yoon was arrested on Aug. 8 on charges of siphoning off company funds under his name.

According to the Seoul Central District Prosecutors' Office, the disgraced chairman is further accused of bribing construction conglomerates in exchange for winning a bid to participate in the project.

Since raiding the offices of nearly 25 local builders in May, including Dohwa, prosecutors have also been investigating allegations that the firms that participated in the mega rivers project colluded to win bids. (Yonhap News)