Main culprit in large-scale loan fraud gets 20-yr prison term

A Seoul court on Wednesday sentenced the chief of a subcontractor of telecom giant KT Corp.'s financially troubled affiliate to 20 years in prison for masterminding a large-scale loan fraud.

The 46-year-old chief of Joonangtnc Co.Ltd, surnamed Seo, was found guilty of colluding with other employees of KT ENS Co., a subsidiary of the country's No. 2 mobile operator KT Corp., to take out some 1.83 trillion won ($1.71 billion) in loans from 16 local banks using forged documents from May 2008 to January 2014.

In the same ruling, Seoul Central District Court also sentenced a 51-year-old former KT ENS employee, only identified by his surname Kim, to 17 years behind bars for his involvement in the financial fraud.

"Seo and Kim pocketed an astronomical amount and some 290 billion won has not yet been collected," Judge Cho Yong-hyun said in his ruling.

"The case prompted KT ENS to file for court receivership and the banks have faced difficulties," he added.

The two fabricated various documents for a special purpose company (SPC) set up by six subcontractors of KT ENS with receivables as collateral, court documents showed.

Not only the documents submitted to the banks but also the receivables were found to have been counterfeit, according to the documents. (Yonhap)