Bankruptcy Shakes S. Korea

President Kim Young-sam ordered a parliamentary investigation Monday into a steel maker’s bankruptcy, which the opposition has blamed on government corruption.

Kim’s ruling New Korea Party agreed to the parliamentary probe, which is rarely used in South Korea but has been demanded by opposition leaders.

Hanbo Steel Industry Co., the country’s second-largest steel maker, declared bankruptcy last week. The company was buried by an estimated $6 billion debt, mostly in bank loans that critics say Hanbo obtained through government influence. The government has denied involvement.

The prosecutor’s office is conducting its own investigation into the Hanbo affair. Opposition leaders accuse the president of complicity in Hanbo’s downfall.

In South Korea, the government controls most banks, and critics charge that politics often influences loan decisions.

In the past, senior government and bank officials have been arrested for allegedly taking bribes in exchange for loans.