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Korean Casino Investigated for Missing Revenue

15 April 2002

SOUTH KOREA – As reported by the Korea Herald: "The prosecution's investigation into a scandal surrounding some 100 billion won in missing revenue at Kangwon Land, appears to have had only limited impact on its gambling business, which continues to flourish.

"The Chuncheon District Public Prosecutor's Office started an investigation late March into the scandal, in which Kangwon Land management is suspected of skimming up to 100 billion won (US$750,810) from its VIP saloon by manipulating balance sheets. The money was allegedly used as a secret fund to support lawmakers at the ruling Millennium Democratic Party.

"The Yonhap News Agency cited management at Kangwon Land, the only legalized casino for Korean nationals, as reporting that since the start of the investigation some VIP guests were avoiding the casino out of fear their identities would be exposed. But in fact, there is little change in the number of guests at the VIP saloon with 53 visiting between April 1 and 11, compared to 54 during the same period in March.

"…The biggest change is a precipitous fall in the company's stock price, which was flying high at 212,000 won (US$159.17) per share on March 25. The price plunged to 177,500 won (US$133.27) on April 10, after the prosecution started its investigation, following media reports and the opposition party's efforts to draw attention to the scandal.

"…Watchers said that the outcome of the scandal is a real concern for locals. If the charges against Kangwon Land are substantiated, it will put the casino industry in jeopardy while damaging the company and its staffers, which will in turn deal a devastating blow to the surrounding economy, they said."

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