[Exclusive] "Kim Sung-tae's 9.7 Billion Won Sent to North Korea Also Includes Payment for Volleyball Tournament Participation"

[Asia Economy Reporter Kim Hyung-min] The prosecution is set to indict former Ssangbangwool Group Chairman Kim Sung-tae soon and is focusing on identifying the nature of the money he sent to North Korea. The prosecution has determined that Kim transferred a total of 8 million dollars (approximately 9.7 billion KRW) to the North, and it is reported that some of this amount included funds provided as consideration to facilitate North Korean athletes' participation in an international volleyball tournament.

A source familiar with the sports community told Asia Economy on the 3rd, "The money Kim transferred to the North included funds provided as consideration to resolve sports-related matters." Based on this tip-off and the indictment details of former Gyeonggi Province Peace Deputy Governor Lee Hwa-young and An Bu-soo, chairman of the Asia-Pacific Peace Exchange Association, who were indicted and detained, Kim reportedly handed over a certain amount, included within 5 million dollars (approximately 6.1 billion KRW), to North Korean officials in January and April 2019 as a measure to facilitate North Korea's participation in the international volleyball tournament. The exact portion of this amount allocated for the tournament participation has not been confirmed. The prosecution believes Kim transferred a total of 8 million dollars to the North in January (2 million dollars), April (3 million dollars), and November (3 million dollars) of 2019.

Former chairman Kim Seong-tae, the real owner of Ssangbangwool Group, who was arrested in Thailand during his life on the run abroad, is being escorted through Incheon International Airport on the morning of the 17th. Photo by Kang Jin-hyung aymsdream@

After receiving this money, North Korea sent 32 male and female athletes from the 4.25 Sports Team, which is at the national representative level, to participate in the "Asia International Volleyball Tournament for Korean Peninsula Peace (Asia Peace Cup)" held in Indonesia from June 23 to 25, 2019. The tournament was one of the key projects promoted by then Peace Deputy Governor Lee Hwa-young and Gyeonggi Province. Around March to April 2019, Gyeonggi Province announced this tournament participation as one of five humanitarian aid projects to North Korea. At a time when inter-Korean relations were at a standstill following three inter-Korean summits in 2018, Deputy Governor Lee and others were strongly determined to ensure North Korea's participation in the tournament. This could have had a significant impact on other North Korea-related projects promoted by Gyeonggi Province.

To ensure North Korea's participation in the tournament, a method to transfer consideration funds was sought, and it appears that former Chairman Kim stepped in. Kim also participated in the fund transfer to boost the stock prices of affiliated companies that were greatly affected by the North Korea aid projects. The Asia-Pacific Peace Exchange Association (APPEA) was also reportedly involved in this process. APPEA contributed 49 million KRW to this volleyball tournament. Having invested a large sum, APPEA had a strong reason to ensure North Korea's participation. A prosecution official refrained from elaborating, stating, "We cannot disclose detailed information."

The prosecution plans to formulate charges and indict Kim as soon as the exact purpose of the money he sent to North Korea is identified. Kim's detention period is until the 5th of this month. Since the court is closed on the weekend, it is likely that the indictment will be filed on the 5th at the earliest, or by the 4th at the latest.

Prosecution [Photo by Yonhap News]

The prosecution is particularly considering whether to apply charges for violating the Inter-Korean Exchange and Cooperation Act. If it is determined that Kim transferred money to the North without approval from the Ministry of Unification for the purpose of North-South economic cooperation business rights, this charge could be applied. However, if the nature of the money was not a bribe to secure Ssangbangwool Group's North Korea economic cooperation business rights but rather funds for North Korea smart farm support projects on behalf of Gyeonggi Province or expenses necessary for Lee Jae-myung, leader of the Democratic Party of Korea, to visit North Korea, different charges should be applied. Reflecting this, Kim recently changed his statement regarding the nature of the money to the latter.

Depending on the nature of the money, the investigation could also target Lee Jae-myung, drawing attention. The prosecution is expected to summon former Deputy Governor Lee for questioning as early as today. He oversaw Gyeonggi Province's North Korea policy and reportedly called Lee Jae-myung during a meeting with North Korean officials and Kim in January 2019, handing the phone over to Kim. The prosecution is expected to investigate the relationship between Kim and Lee and whether Lee was aware of the remittance to North Korea.