Korean Prosecutors Raid Shipping Safety Watchdogs

By MarEx 2014-04-24 09:33:00

South Korean prosecutors said on Thursday that they had raided shipping safety watchdogs as part of expanded investigations following the sinking of a ferry last week in which more than 300 people were killed or missing presumed dead.

"The objective was to investigate malpractices and corruption in the entire shipping industry," Song In-taek, head deputy chief prosecutor at Incheon District Prosecution Service, told reporters.

The Korea Register of Shipping, which is in charge of testing and certifying ships, and the Korea Shipping Association (KSA), which is responsible for routine shipment inspections, were not immediately available for comment.

Prosecutors raided the register's headquarters in the southern port city of Busan on Thursday. Yonhap news agency said investigations would look at the possibility of corruption in testing ships and whether bribes were paid.

The raid on the KSA took place on Wednesday when prosecutors also raided the home of Yoo Byung-un, the head of a family that owns the Chonghaejin Marine Co. Ltd, the company that operated the ship.

"The company will fully cooperate with the investigation," Kim Jae-beom, an official at Chonghaejin, told Reuters by telephone.

The finances of Chonghaejin and its complex share structure have come into the spotlight since the disaster. Yoo was jailed for fraud for four years in the early 1990s.

Asked if Yoo had gone overseas, prosecutors said he was still in South Korea but they had yet to contact him.

The financial watchdog and prosecutors are looking into the assets of Yoo's family for any possible embezzlement, prosecutors added. 

By Ju-min Park and Sohee Kim (C) Reuters 2014.