SSANGBANGWOOL GROUP OFFICES RAIDED

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Prosecutors have raided the offices of Ssangbangwool Group over allegations that the underwear manufacturer smuggled a large sum of foreign currency to China three years ago. There is speculation the money may have gone to North Korea as the suspected smuggling coincides with the time when Ssangbangwool subsidiaries were engaged in projects related to North Korea.

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Prosecutors have raided the offices of Ssangbangwool Group and several of its affiliates, including Nanos and Kanglim. They are part of an investigation into allegations the underwear maker secretly sent several billion U.S. dollars to China in 2019. Some 60 executives and employees of the company visited China's Shenyang in January and November that year with most of them being one-day business trips. Prosecutors suspect they smuggled money into China by hiding notes worth tens of thousands of dollars inside books and cosmetic cases. South Korea's Foreign Exchange Transactions Act bans taking out foreign currency over a certain amount out of the country without filing a report. Prosecutors are especially trying to find out the money's final destination. At the time, Ssangbangwool was actively engaged in North Korea-related projects. The group's former chairman even met a North Korean official in Shenyang in May 2019. In that meeting, a contract was signed regarding the joint development of minerals, such as rare earth elements, between Nanos and North Korea's National Economic Cooperation Federation. Investigators are looking into whether the money entered North Korea around that time. There is also speculation that former vice governor of Gyeonggido Province Lee Hwa-young, who has been arrested on charges of receiving bribes from Ssangbangwool, was paid to help arrange meetings with North Korea during that time. Last week, prosecutors raided the homes of former Ssangbangwool executives and chairman of the Asia-Pacific Exchange Association. They were also involved in assisting Ssangbangwool's North Korea projects. So far, a handful of company officials have been booked on charges of violating the foreign exchange transactions law. The probe is expected to expand in order to track down the flow of the smuggled foreign currency.