By: Lee Kyung-min

Prosecutors have questioned Heungwoo Industrial CEO Lee Cheol-seung over allegations that he helped POCSO create a 4 billion won ($3.7 million) slush fund.

This is the latest development in the prosecution’s months-long probe into the Lee Myung-bak administration’s “failed energy diplomacy.”

Depending on the investigation results, former and incumbent POSCO executives are likely to face questioning.

Lee’s company was a POSCO subcontractor that took part in a highway construction project in Vietnam in 2009-12.

The prosecution suspects that Lee helped POSCO create the slush fund by returning some of the payment, which POSCO had inflated.

The prosecution said Lee was also suspected of being involved in delivering 1 billion won in kickbacks to former and incumbent POSCO executives in exchange for their influence in helping his company win a bid to work on the Saemanguem reclamation project.

A key executive of Heungwoo executive, surnamed Woo, was jailed last month for his alleged involvement.

The prosecution is likely to summon former POSCO E&C Vice Chairman Chung Dong-hwa, who was in charge of the steelmaker’s construction subsidiary at the time the alleged slush fund was created.

The prosecution raided Chung’s home in March and confiscated relevant material.