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South Korea slush-fund scandal hits president

The political uproar in South Korea opened a rift in the ruling party yesterday after the former president, Roh Tae Woo, was formally indicted for corruption, along with leaders of the country's biggest companies.

Twenty days after his arrest, prosecutors charged Mr Roh with accepting bribes worth $355m (pounds 232m) during his five-year term, which ended in 1993. The scale of the alleged corruption is staggering. Thirty-five businessmen are said by the prosecutors to have paid the former president individual sums of up to $32m for government contracts. These he held in a secret slush fund, scattered through bank accounts held in false names, which he allegedly used to give political favours.

Mr Roh has admitted to concealing $650m, which he claims was amassed through legitimate political donations. Investigators say he has refused to answer many of their questions and may be hiding far larger sums.

Several Roh aides were also charged, along with seven businessmen accused of giving the bribes, including the chairmen of the Samsung, Daewoo and Dong Ah conglomerates. Only Mr Roh was held in custody, however; the markets took this as a sign that the businessmen would be treated leniently, and stock prices rose slightly.

But the arrests provoked stirrings of discontent with the current President, Kim Young Sam, as the chairman of his ruling Democratic Liberal Party (DLP) tendered his resignation - the first clear sign of Mr Kim's political security being endangered by the investigations.

The DLP chairman, Kim Yoon Hwan, was a close aide of both Mr Roh and his predecessor, Chun Doo Hwan, who was arrested on Sunday on separate charges. The party chairman withdrew his resignation after a meeting with the President, but the rumour in Seoul was that several members of his faction would soon resign. That would leave President Kim in a precarious position in the run-up to parliamentary elections next spring. The likeliest outcome seems to be a drastic realignment of Korean politics, with the opposition filling the gulf left by the defectors.

But it is a risky strategy for the President, who is thought by many to have let events run out of control, goaded by allegations that he too benefited from Mr Roh's slush fund. What began a month ago as a corruption scandal has become an attack on an entire generation of South Korean leaders.

With the filing of yesterday's charges, attention will now focus on the much more serious treason case facing Chun Doo Hwan. Three days ago he was arrested for questioning about his leadership of a military coup in 1979. As generals, Mr Chun and Mr Roh are widely believed to have ordered the massacre of more than 200 pro-democracy demonstrators in the city of Kwangju in 1980, still a profound wound in the divided country.

Mr Roh is also being questioned about the massacre, and yesterday five other retired generals, lesser participants in the coup, were banned from travelling overseas. In a country which achieved democracy only two years ago, after 32 years of military rule, these are bold and disquieting moves.