Thursday, December 07, 2006

Prosecutors are questioning two former officials from the Ministry of
Culture and Tourism over suspicions that they took bribes from a company
issuing state-licensed vouchers used for payouts at video game arcades.
According to investigators at the Seoul Central District Prosecutors'
Office, Kwak Young-jin, a former director of the Culture Ministry's cultural
industry bureau who now works for the Prime Minister's Office, spent 10
million won ($10,790) to buy shares in Andamiro Entertainment in 2000. The
company failed in its plan to be listed on the stock market, however, and
Kwak was paid 11 million won, prosecutors said. Kim Yong-sam, who worked
under Kwak at the ministry in the division for game and music content,
invested 50 million won in Andamiro on Kwak's advice and was given 47
million won back. Kim now works at the state-run Korea National University
of Arts. Besides Kwak and Kim, two other Culture Ministry officials bought
stocks of Andamiro, investing 10 million won each and getting 11 million won
back, prosecutors said. Andamiro is one of the 19 companies licensed by the
government to issue gambling vouchers. The company's chief executive, Kim
Yong-hwan, 47, was arrested Monday for misappropriating about 6 billion won
in corporate funds and using some of the money to lobby government officials
for business favors. ``There is enough reason to believe that the money
Andamiro Entertainment's Kim repaid the ministry officials were actually
bribes. The public officials bought Andamiro's stocks at 200,000 won per
share but did not suffer financial loses after stock prices dropped below
80,000 won per share three or four years later,'' said a prosecution
official. ``The ministry's cultural industry bureau was directly related to
licensing companies that issue gift vouchers _ which were used for illegal
gambling payouts after being converted to cash _ and sell video game
machines, so their connection with Andamiro certainly raises a lot of
questions,'' he said. Since August prosecutors have been investigating
suspicions that public officials from the Culture Ministry and its
sub-organizations were bribed by businessmen seeking licenses to issue gift
vouchers or distribute slot machines. The ministry in 2002 made the decision
to allow certain types of gift certificates to be used for payouts at
adults-only video game arcades, a move that is now blamed for facilitating
the growth of the country's illegal gambling sector.

With most gaming rooms unlawfully trading the vouchers for cash to lure more
customers, the country's slot machine empire grew beyond recognition with
the number of adults-only game arcades outnumbering 24-hour convenience
stores by 20,000 to 9,500 earlier this year.

Since starting the investigation, prosecutors have arrested several public
officials and businessmen, including Baek Eeek, the current director of the
ministry's cultural media bureau, and have imposed overseas travel bans on
more than 100 people.