Former dictator: deadbeat or real estate tycoon?

Posted on : 2012-06-13 15:22 KST Modified on : 2012-06-13 15:22 KST
Chun Doo-hwan claims he is unable to repay debt to government while linked to slew of valuable assets
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By Kim Oi-hyun and Yoo Shin-jae, staff reporters

In 2003, former president Chun Doo-hwan paid a fine of 290,000 won (about US$250), after which he claimed to have only 291,000 won left. Chun's guilt on charges of receiving bribes from large corporations was confirmed by a Supreme Court ruling in 1997 that ordered him to pay a total of 220.5 billion won (about US$189 million) in fines. He paid only 53.2 billion won and still owes 162.3 billion.

It’s a question then how he manages to live an apparently extravagant life. On June 5, Chun’s 27-year-old granddaughter was married at the opulent Shilla Hotel in Seoul in an expensive ceremony.

Central to suspicions that Chun enjoys access to undeclared funds are Chun’s 60-year-old brother-in-law Lee Chang-seok and his 38-year-old second son Chun Jae-yong. In November 2003, when properties belonging to Chun and his wife that were registered in Chun’s name (rather than his wife’s) were put up for auction by court order, Lee, who is suspected of being the former president’s “slush fund manager,” put in a winning bid of more than twice the appraised value. Since then, Lee has not exercised his rights of ownership to the property and has instead let Chun and his wife continue to live there.

In December 2006, Lee sold half of a 950,000m2 piece of land that was registered under his name in Osan, Gyeonggi province for the bargain price of 2.8 billion won to Chun Jae-yong. The younger Chun has had no career to speak of, unlike his elder brother Jae-guk who is an established businessman and runs the publishing company Sigongsa.

One year later, Jae-yong sold the land for 40 billion won, 15 times more than he paid for it. It appeared that Lee had handed the enormous profit to his nephew. This prompted suspicions that the actual owner of the land had been Chun Doo-hwan.

Also questionable is SWDC, a company owned by Chun Doo-hwan, Chun Jae-yong and their wives. The company was created in January 2004, when Lee bought 142 memberships to Seowon Valley Golf Club for 11.9 billion won. At the end of last year, all 142 memberships were put up for sale at once. This led some to ask where the money to purchase the memberships came from.

There are also suspicions that real estate used by Chun Jae-yong and his family in the United States may actually belong to Chun Doo-hwan. These include residences bought in 2003 in Atlanta, Georgia and 2005 in Orange County, California, in the name of Chun Jae-yong’s actress wife Park Sang-a.

The same applies to funds used to buy the luxury villa in Itaewon in which Chun Jae-yong and his wife currently live, and land in Yongin, Gyeonggi-do. A loan of almost US$18 million made by Lee Chang-seok to BL Asset, a real estate development and leasing corporation headed by Chun Jae-yong, also has eyebrows raised.

Chun Jae-yong was also indicted in June 2007 on charges of inheritance tax evasion. He was sentenced to two and a half years in prison, three years’ probation and a fine of US$5.04 million.

A farm in rural Gyeonggi province bought by Chun’s eldest son, Jae-guk, in 2004, has also been the subject of gossip, while suspicions extend to the multi-million dollar villa in Seoul’s Hannam-dong bought by the former president’s third son, Jae-man, and a vineyard worth several hundreds of millions of dollars that he runs in Napa Valley, California.

Every time the payment deadline approaches, he pays back part of it using debts collected from the bank or fees earned by giving lectures, and takes liberal advantage of three-year deadline extensions.

In 2004, when the Central Investigation Department of the Supreme Prosecutors’ Office brought part of Chun’s slush fund to light, his wife Lee Sun-ja made a repayment of 20 billion won by proxy, calling it “her precious money.”

 

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