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(5th LD) Prosecutors raid sunken ferry's operator, affiliates

2014/04/23 22:52

INCHEON, April 23 (Yonhap) -- Prosecutors raided offices of the operator of a sunken ferry and its affiliates Wednesday as part of a widening probe into the cause of the disaster.

Investigators of the Incheon District Prosecutors' Office raided Cheonghaejin Marine Co., the Sewol's operator based in the coastal city, just west of Seoul, as well as some 20 offices of its affiliates and a religious group in Seoul believed to be related to the owner family.

It is part of the ongoing investigation into what caused last week's deadly sinking of the ferry, which is likely to be recorded as one of the country's worst maritime disasters. Of the 476 people on board, 174 people survived the disaster, and 150 have been confirmed dead, with 152 people still missing as of noon on Wednesday.

The residence of the Sewol's owner, Yoo Byung-eun, a former chief of Semo Marine Co., in Seoul was also raided. Yoo is suspected of a breach of trust, embezzlement, foreign exchange trading and tax evasion, among other charges.

The investigators said they obtained computer hard disks and several documents such as accounting books to corroborate the charges.

"The focus of the probe will be to see if the owner family has accumulated huge wealth by embezzling corporate funds while failing to fulfill its duty of properly managing the companies," a prosecutor said. "Tracing their hidden assets is also needed to pay damages to the victims and their families."

   While establishing 13 overseas units, along with another 13 domestic affiliates, the owner family was found to increase its fortune to over 240 billion won (US$230.8 million), with more assets expected to be hidden.

The debt-ridden Cheonghaejin Marine is virtually a successor to Semo Marine, which went bankrupt in 1997, hit by a series of scandals, including a sinking of its cruise boat.

Cheonghaejin was set up in 1999 by taking over ships and assets held by Semo Marine's affiliate. Yoo's two sons control Cheonghaejin through a complicated ownership structure.

Some 40 percent of Cheonghaejin is owned by Chonhaiji Co., a shipbuilder controlled by I-One-I Holdings Co. Yoo's two sons hold a combined 40 percent in I-One-I Holdings.

After analyzing the confiscated data, the prosecution is planning to summon Yoo and his family members as well as affiliates' officials. They have already been banned from leaving the country.

The Evangelical Baptist Church based in Yongsan, central Seoul, is also on the prosecutors' list. It is unusual for the prosecution to look into a religious entity.

The church was established by chief Yoo's father-in-law, Kwon Sin-chan, in the 1960s and is led by Yoo. It is considered as a cult with some 20,000 followers, including most of the senior officials of Cheonghaejin's affiliates and most of the Sewol's crew members.

The church is seen as exercising influence over the management of the group, and the religious entity, customarily exempted from paying taxes, may be a breeding ground of corruption, according to prosecutors.

The joint team of prosecutors and police officers also widened their probe by questioning more relevant officials and crew members to learn what caused the tragedy.

So far, nine crew members who survived the sinking have been arrested, including the captain, Lee Joon-seok, who is accused of abandoning his passengers, mostly high school students on a field trip.

The court also issued arrest warrants for two more crew members for allegedly failing to carry out maintenance and repairs as well as a safety check.

The joint team also sought an arrest warrant against a 57-year-old first mate surnamed Sohn on the same charges, two days after he attempted to kill himself.

The prosecutors said the crewmen had not even tried to evacuate the passengers when the ship was going under, in breach of maritime law.

All 15 crewmen in charge of driving the ship survived the disaster, as they escaped through a passage reserved for them after instructing the passengers to stay put. Of the remaining 14 crew members, including part-time workers and foreign singers, only five were rescued.

"Many of the crewmen said they should have taken measures to save the passengers," an investigator said. "Some of their remarks are contradictory, so we need further investigation."

   The investigation has showed that a total of seven crew members, including a chief engineer, were the first people to reach the shore in a life boat, officers said.

The skipper, meanwhile, escaped the sinking on the second rescue boat and pretended to be a passenger, they added.

While a faster than usual turn is believed to be a major cause of the accident, investigators said they are open to every possibility, including mechanical problems, poor driving by novice crewmen, structural problems due to changes of the ship's structure and overloading.

An inexperienced third mate in her 20s commanded the ship while the captain had gone to his bedroom. The 20-year-old 6,825-ton ferry was loaded with 3,608 tons of cargo, though experts say it should have carried 987 tons to maintain its balance, the investigators said.

They have also been analyzing text messages of crew members and surviving passengers and relevant data to learn exactly what was happening at the time of its sinking and how crew members were dealing with the emergency situation.

The investigators further alleged that an apprentice mate, whose identity has been withheld, made radio communication with the vessel traffic service (VTS) and asked whether passengers would be rescued if they abandoned ship.

According to a transcript of their communication released earlier, the Jindo VTS had ordered the ferry to take emergency steps to evacuate passengers, but the crew took no such measures during the communication.

The transcript also suggested that the mate had trouble communicating with the passengers and repeatedly asked whether they would be saved.

Meanwhile, the prosecution in the southern port city of Busan launched a full-scale investigation into the overall maritime industry, as well as the entity in charge of the safety inspection of vessels.

The Korean Register of Shipping (KR), a nonprofit organization in charge of inspecting and certifying vessels on behalf of the government, is under an intensive probe.

The KR approved the Sewol for operation in February after doing a safety check on more than 200 items.

"We are looking into any illegality over the course of its inspection into and certification of the ship operators," a prosecutor said.



(Notice) Corrections and Official Statement by EBC

*Pursuant to an order by the Press Arbitration Commission, we have been asked to publish the following statement from the Evangelical Baptist Church (EBC).

Evangelical Baptist Church ("EBC," the "Salvation Group"*) and Mr. Yoo Byung-eun Related Corrections and Official Statement by EBC

After the April 16, 2014 Sewol ferry tragedy, the media published a flood of indiscriminate articles regarding the EBC (also known as Guwonpa* in Korean) and Mr. Yoo Byung-eun. Due to the immense volume of articles, it is impossible to correct and counter every single one. Therefore, in agreement with the EBC and the surviving family of Mr. Yoo Byung-eun, we are publishing the following combined corrections and Official Statement by EBC.

* This label, which is translated as the Salvation Group, has been applied disparagingly to the Evangelical Baptist Church

The majority of the media reported that, as the owner of the Sewol ferry, Mr. Yoo Byung-eun directly managed Chonghaejin and its affiliated companies and that he used operating funds for personal purposes. However, Mr. Yoo retired from his executive management position in 1997. He did not own any shares in the noted companies, nor had he managed operations, nor used the operating funds for personal reasons. He was not the owner of the Sewol ferry, nor the Chief Executive Officer of Chonghaejin. As such, he had not provided any directives in regards to the overloading of the Sewol ferry or its renovation (e.g. expansion of the cabins and cargo area).

Although some media outlets reported that Mr. Yoo Byung-eun had established favorable relationships by paying bribes to politicians, Korean Prosecutors' Office verified last October that reports of such bribery activity were false. We hereby correct all articles pertaining to this matter.

The majority of the media reported that Mr. Yoo Byung-eun was a wealthy billionaire who owned real estate properties, including Geumsuwon, both in Korea and abroad under other people’s names and that he diverted the tithes and offerings made to the EBC to an illicit fund and expanded his businesses.

The EBC has confirmed that reports of his wealth incorrectly included real estate properties owned by farming associations, which had been established by church members. Thus, these reported properties were not held by Mr. Yoo Byung-eun in another person’s name, but are owned by the noted farming associations. Additionally, Mr. Yoo did not embezzle from the EBC nor did he expand his businesses by diverting tithes or offerings of the pertaining church and its members into an illicit fund.

The EBC has stated that Mr. Yoo Byung-eun was not a religious sect leader. Although he was ordained as a pastor in the 1970s by missionaries at the Far East Broadcasting Company, he did not serve as a pastor. There is no pastor in the EBC, since it is a congregation of laymen.

It was also verified that Mr. Yoo Byung-eun did not participate in the official

process to register EBC as a church in 1981, nor had he been revered as a religious sect leader or been made into a God-like figure by the pertaining church or its members.

The majority of the media reported that the EBC is a religious cult and that it preaches doctrines that are not consistent with Christianity. There are certain churches in Korea that call the EBC a cult, solely based on differences between their and the EBC’s doctrines. However, the EBC has affirmed its belief in the Bible, the Trinity, Jesus’ conception by the Holy Spirit, His birth, death, and resurrection. The EBC does not worship a particular individual as a religious sect leader or preach any doctrine that contradicts the Bible.

It was verified that the captain and the crew members who abandoned the ship at the time of the Sewol ferry accident are not members of the EBC. Only two people have been confirmed as members of the EBC: the late Jeong Hyun-seon, who died while evacuating passengers and thus was designated a national hero, and another person, who had been rescuing passengers and was himself later rescued in an unconscious state. It has also been verified that the EBC does not own any shares of Chonghaejin and that it did not engage in its management. Furthermore, the EBC has stated that Lee Yong-wook, a senior Coast Guard official, has not attended the EBC for the past 15 years.

The majority of the media reported that Mr. Yoo Byung-eun attempted to flee the country by ship, that he requested asylum in several countries but was rejected, and that he possessed firearms to protect himself. The prosecutors hastily announced without confirming the facts that Mr. Yoo Byung-eun attempted to seek asylum. However, two months later on August 18, the prosecutors revised their statement noting that “upon investigation into the identity of the caller, a person with no relation to the Salvation Group had placed a prank call.” In addition, there was no evidence of any attempt by Mr. Yoo to flee the country. It has also been confirmed that the firearms alleged to be in his possession were collectibles. Furthermore, not only were they collectibles that could not be operated they were also not in his possession while he was fleeing.

Some news articles created the impression that the EBC and Mr. Yoo Byung-eun were behind the Odaeyang mass suicide incident. Some also reported that Mr. Yoo Byung-eun had been able to rapidly grow the Semo Group in the 1980s (e.g. securing the business rights to operate the Han River Ferry Cruise) by using a connection with Mr. Chun Kyung-hwan and a close relationship with the former President Chun Doo-hwan’s Fifth Republic of Korea. However, the Odaeyang mass suicide incident was thoroughly investigated by the prosecution and the police three times—in 1987, 1989, and 1991. All three investigations concluded that the EBC and Mr. Yoo Byung-eun had no connection to the incident. Also, neither Mr. Yoo Byung-eun nor the EBC had any collusive ties with the Fifth Republic of Korea. All of this was verified in the official document issued from the Incheon District Prosecutors’ Office on May 21, 2014.

"We sincerely request of the press to serve the public’s right to know with objective and balanced reporting, guarding against biased arguments from its interviewees, all the while fulfilling its duty and responsibility to create no victims from such reporting.

We ask the press to reflect upon its manner of reporting on the Sewol ferry accident. Without waiting for the truth to be revealed through the completion of the investigative and judicial process, the reporting largely focused on releasing exclusive and sensational news reports, which led to misleading the public and essentially conducting a trial in the court of public opinion. We also ask the press to avoid compromising the democratic principles of a constitutional state and to prudently take strict precautions against those forces that aim to take advantage of this period of heartbreak for this nation in order to advance their own position and authority."