Seoul prosecutors yesterday raided the headquarters of Grand Korea Leisure, a subsidiary of the state-run Korea Tourism Organization, and foreigner-only casinos in Seoul run by the company.
Prosecutors and investigators seized financial documents and computer hard drives from two Seven Luck Casinos and the casino in the Millennium Hilton Seoul and their offices.
Prosecutor Kim Su-nam of the Seoul District Prosecutors` Office said, “We carried out the raids not only because of a request from the Board of Audit and Inspection, but also because of tips we got on other alleged irregularities.”
The board filed its request early this month, saying the tourism organization wasted 2.8 billion won of budget by signing a contract with a construction firm unqualified to set up gambling facilities under construction law.
The tourism organization and its subsidiary will be probed on the following allegations: irregularities in the selection of the casino operator; illegally spending the casinos’ operational income; murky selection of a security and computer system supplier; and embezzlement.
The establishment of foreigner-only casinos in Korea began to receive serious consideration after the revision of a tourism promotion law in 1994, which changed the categorization of the casino business from gambling to tourism.
The opening of new casinos was delayed due to public opposition until the tourism body approved the building of new foreigner-only casinos in January 2005 under the Roh Moo-hyun administration.
In September 2005, the organization launched its subsidiary Grand Korea Leisure, which opened its first casino in Seoul’s Gangnam district in January 2006 and later added two more in the country.
Prosecutors also raided the Export and Import Bank of Korea for lending a small company a few billion won though the company was insolvent.