Prosecutors probe alleged hidden slush funds of ex-President Roh Tae-woo's family

South Korean prosecutors have initiated their first coercive investigation into allegations of hidden slush funds totaling 30 billion won (approximately $21 million) linked to the family of former President Roh Tae-woo. The probe, led by the Seoul Central District Prosecutors' Office's crime proceeds recovery division, is focusing on charges of concealing criminal proceeds and tax evasion.

The investigation gained momentum following a divorce lawsuit between SK Group Chairman Chey Tae-won and his wife, Roh Soh-young, who is Roh Tae-woo's daughter. Roh Soh-young claims that her father's slush funds provided the foundation for the Sunkyong Group's growth. She submitted evidence to the court, including a 30 billion won promissory note issued in 1991 under the name of Sunkyong Construction and a "Kim Ok-suk memo" from 1998-1999, which allegedly details slush funds totaling 90.4 billion won.

Prosecutors on Tuesday searched the Seoul home of Kim Ok-suk, Roh Tae-woo's widow, and also raided foundations where their son, Roh Jae-heon, serves as chairman and executive director. These foundations include the East Asia Cultural Foundation and the "Roh Tae-woo Center for the Era of Ordinary People." The investigation is examining the flow of funds into these organizations, with approximately 15 billion won transferred to foundations linked to Roh Jae-heon reportedly serving as a key trigger for the current coercive measures.

The probe faces challenges, including the need to trace funds that may predate South Korea's 1993 financial real-name system. The passage of a revised law allowing for the confiscation of illicit assets even after the death of the perpetrator provides a potential legal basis for recovering the funds. However, the age of key figures involved and the passage of time complicate the investigation, with prosecutors likely to focus on analyzing financial records and personal documents seized during the raids.