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Cho Kuk's cousin questioned over family investments

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By Bahk Eun-ji

Prosecutors have been questioning a cousin of newly appointed Justice Minister Cho Kuk, who is at the center of allegations about suspicious investments in a private equity fund by the latter's family.

The prosecution has detained Justice Minister Cho Kuk's cousin on charges of embezzlement and and is questioning him over allegations involving the Cho family's suspicious investments. Yonhap
The prosecution has detained Justice Minister Cho Kuk's cousin on charges of embezzlement and and is questioning him over allegations involving the Cho family's suspicious investments. Yonhap
The cousin, also surnamed Cho, 36, was detained upon his arrival at Incheon International Airport, Saturday, and charged with embezzlement amid his alleged involvement in other suspicious financial activities. He had fled the country when the allegations emerged last month in an apparent bid to escape investigation.

Cho's wife and two children invested 1.05 billion won ― 950 million won from Cho's wife and 50 million won each from the children ― in a private equity fund titled Blue Core Value-Up 1, which was managed by Co-Link Private Equity.

The family has claimed they invested the money in the fund on the recommendation of the cousin, who they said was an expert in asset management, adding they did not know which businesses Blue Core Value-Up 1 would invest in.

But suspicions are that the cousin is the de facto owner of Co-Link Private Equity and the fund was actually run by the Cho family. As Cho was a public official working at Cheong Wa Dae at the time of the investment in July 2017, he was banned from directly investing in stocks or funds.

Co-Link then invested 1.38 billion won in Wells C&T, a small, local streetlamp switch maker, which saw a sudden huge increase in sales after it won bids for state-run projects. This raised suspicions that Cho used his influence as a presidential secretary to get the contracts awarded to the company. A former ruling party member wads also allegedly an adviser at Co-Link and lobbied politicians and government officials for Wells C&T to win the bid for Seoul's subway Wi-Fi upgrade.

A recently disclosed phone conversation recorded between the cousin and the Wells C&T chief, surnamed Choi, Cho can be heard asked him to lie to the prosecution about money flows. In the phone conversation made while he was abroad in late August, Cho said, "we both could die" and "(it could make) nominee Cho fail to become the minister."

The prosecution questioned the cousin over exactly how the Cho family invested the money in the fund and whether Cho's wife, Chung Kyung-sim, who invested the largest amount, was involved in investment decisions.

It is widely predicted the prosecution will soon summon the justice minister's wife for questioning over the suspicious investments and among other allegations.

Cho's wife was also allegedly paid 14 million won between December last year and June this year by WFM, a company in which Co-Link also invested, as fees in return for giving business advice to the company.


Bahk Eun-ji ejb@koreatimes.co.kr


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