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Harry Cassin Publisher and Editor

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Elizabeth K. Spahn Editor Emeritus 

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Julie DiMauro Contributing Editor

Thomas Fox Contributing Editor

Marc Alain Bohn Contributing Editor

Bill Waite Contributing Editor

Shruti J. Shah Contributing Editor

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Richard Bistrong Contributing Editor 

Eric Carlson Contributing Editor

Bill Steinman Contributing Editor

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FCPA Blog Daily News

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Thursday
Apr242014

South Korea probes graft in deadly ferry sinking

Prosecutors in South Korea said Thursday that raids on the shipping safety watchdog and the owner of the sunken Sewol ferry were part of an industry-wide investigation into corruption.

The vessel capsized and sank last week with 476 passengers and crew on board.

More than 300 -- most of them students and teachers from the same school -- drowned or are missing and presumed dead.

Investigators said they're also searching the offices of some 20 companies affiliated with the ferry operator, Cheonghaejin Marine Ltd.

"The objective [of the police raids] was to investigate malpractices and corruption in the entire shipping industry," Song In-taek, head deputy chief prosecutor at Incheon District Prosecution Service, told reporters.

The captain of the ferry was arrested Saturday on suspicion of negligence and abandoning people in need. Two crew members were also taken into custody.

Reuters said a South Korea legislator "claimed Wednesday that the ship was overloaded with more than three times its recommended weight of cargo, and prosecutors are investigating whether the ship's operator, Chonghaejin Marine Co. Ltd., bribed government inspectors to give the vessel a clean safety certificate."

Prosecutors Wednesday also raided the home of Yoo Byung-un, the head of a family that owns the Chonghaejin Marine Co.

Investigators are looking for signs of embezzlement from the company, Reuters said.

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Richard L. Cassin is the Publisher and Editor of the FCPA Blog. He can be contacted here.