South Korean Officials Indicted On Corruption Charges Linked To IBM Affiliate

Yonhap news agency said prosecutors alleged that IBM's South Korean branch, IBM Korea, and its local affiliates used bribes to win some 66 billion won ($55 million) worth of procurement contracts from government agencies.

Prosecutors were not immediately available to comment on the report.

"We regret the actions by several individuals named in the indictments who violated IBM Korea's strict code of business conduct and insistence on the highest ethical standards," the company said in a statement. Such activity was neither approved nor condoned by IBM Korea."

Among those indicted were Jang Kyong-ho, IBM Korea's executive director in charge of business with government organizations, and a tax official, Han Doo-hyun.

Jang was accused of helping Winsol, a local distributor of IBM servers, win about 43 billion won ($35.8 million) worth of contracts from the National Tax Service and four other public offices through rigged bids between 2001 to 2003.

Jang also was suspected of helping Winsol earn contracts from the Ministry of Information and Technology. He allegedly bribed competing companies - LG Electronics and SK C&C, a subsidiary of South Korea's third largest conglomerate, SK - to give up their bids.

Jang and two other IBM Korea officials have been fired for the violations.

Prosecutors also accused government officials received bribes in return for turning a blind eye to the prearranged bids, as well as providing information on competing bids.

Jang and 11 others were arrested in recent weeks and indicted on bribery charges and for violating fair trade laws. Prosecutors indicted 36 others on similar charges, but have not arrested them.

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