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Korea Prosecutors Question Aide

May 1, 1998

SEOUL, South Korea (AP) _ Prosecutors questioned South Korea’s former finance chief Friday as part of an investigation into whether he and other officials aggravated South Korea’s economic crisis by ignoring signs of danger.

Government auditors have said Former Finance Minister Kang Kyong-shik sloughed off repeated warnings by subordinates that the financial turmoil engulfing Southeast Asia would reach South Korea late last year, and failed to relay the messages to the president.

Prosecutors trying to determine whether criminal charges should be filed against any officials from the previous administration posed similar questions to a former presidential adviser. Kim In-ho, a senior economic adviser to former President Kim Young-sam, was asked whether he had lied to his boss about the nation’s financial woes.

The extent of South Korea’s economic troubles surfaced last year as its currency and stock market plunged, turning the world’s 11th largest economy into the recipient of a record $58 billion bailout from the International Monetary Fund in December.

After stepping down in February, Kim Young-sam said he was informed of the severity of the problems only 10 days before Seoul asked the IMF for help in November.

Kim In-ho and Kang have said they kept the former president properly informed of the problems.

Kim Young-sam’s five-year term as president ended amid intense public criticism for his handling of the economy. Thousands of companies have collapsed and the number of jobless has doubled.

Update hourly