By Kim Rahn
Staff Reporter

Prosecutors have raided the home and offices of Park Yeon-cha, one of former President Roh Moo-hyun's strongest supporters, to find evidence of alleged tax evasion and the using of insider information in the trading of stocks of Sejong Securities in 2006.

The raid comes amid the scandal implicating the former President's elder brother, Roh Geon-pyeong, in bribe taking in exchange for facilitating Sejong's sale to Nonghyup Bank.

Investigators seized financial documents and stock trading records at the home of Park, head of Busan-based shoe making company Taekwang Ind. They also raided homes of other Taekwang executives; their offices; Taekwang's affiliate Jeongsan Country Club in Gimhae, South Gyeongsang Province; and a Nonghyup subsidiary, Huchems, which Taekwang currently owns.

Park allegedly raked in some 17.8 billion won by purchasing shares in Sejong Securities before Nonghyup's acquisition in early 2006 and reselling them afterward. Prosecutors suspect he exploited insider information, and have confirmed that he bought some of the stock under false names to evade tax.

He is also suspected of evading additional taxes, and embezzling company funds. Park allegedly set up a company in Hong Kong and obtained about 80 billion won in dividends between 2002 and 2005 but did not pay 20 billion in income tax. Park claimed he spent the 80 billion won in expanding the company, adding it was not a slush fund for ranking officials.

Taekwang also acquired Huchems at a bargain price, and prosecutors have confirmed that before the acquisition Park provided two billion won to then Nonghyup head Chung Dae-kun and was recently paid back. He bought stocks of Huchems under borrowed-names before the takeover, and gained 8.6 billion won in capital gains, as the price of the stock jumped afterward.

In a related case, prosecutors reportedly secured evidence that the elder Roh received ''financial rewards'' for influence-peddling in the sale of Sejong Securities to Nonghyup, and will question him soon.

Former Sejong Capital CEO Hong Ki-ok allegedly sought the elder Roh's help for the deal through Chung Hwa-sam, one of former President Roh's high school friends, and his brother, Chung Kwang-yong, as he was close to the then Nonghyup head.

Hong gave more than three billion won to the Chung brothers after the acquisition, and prosecutors suspect the money might have gone to the elder Roh.

rahnita@koreatimes.co.kr