The head of a South Korean conglomerate has acknowledged giving North Korea millions of dollars to help entice Pyongyang to attend an inter-Korean summit nearly three years ago. The revelation is the latest chapter in a saga that has sullied the reputation of South Korea's president in his waning days in office.
The head of the Hyundai group said the $500 million in secret payments to Pyongyang helped bring the reclusive communist state to the summit with South Korea in June 2000.
Chung Mong-Hun told reporters on Sunday that the money was primarily intended to secure business rights for Hyundai in North Korea.
He apologized for the payoff but said it should not hamper Hyundai's activities in the North, which include power generation, communications a and tourism projects.
His statement follows an apology Friday from South Korea's President Kim Dae-Jung about a covert and illegal $200 million payment to North Korea just before the 2000 summit. That money, borrowed from a state-run bank, was part of the payment Hyundai made to North Korea.
South Korea still considers North Korea an "anti-state entity" and it is illegal to provide cash to Pyongyang without formal government approval.
President Kim said his government asked for Hyundai's help in arranging the historic summit. The South Korean leader was awarded a Nobel Peace Prize for holding the summit. Opposition politicians, however, are calling for a special prosecutor's investigation, and say those involved in the payments should be punished. North Korea has threatened to halt reconciliation projects if Seoul investigates the Hyundai deal.
The scandal has tainted the legacy of the South Korean president, who leaves office in 10 days. His successor, Roh Moo-Hyun, said he will continue Mr. Kim's sunshine policy of engagement with North Korea.
Relations on the Korean Peninsula have been strained in the past few months following U.S. revelations that North Korea may be developing banned nuclear weapons. Still, South Korea has carried out a series of economic and cultural exchanges with the North in the past several weeks.