South Korean spy charged with forging Chinese government records

By IAN ALLEN | intelNews.org
Authorities in South Korea have charged an intelligence officer with forging Chinese government documents that were used in a court case against a man accused of spying for North Korea. IntelNews readers will remember the case of Yoo Woo-sung, a prominent North Korean defector living in the South, was arrestedlast year on charges of espionage. In May of that year, court documents revealed that Yoo had been arrested following testimony from his own sister, also a North Korean defector. She had apparently been sent to the South by the North Korean intelligence services, and tasked with collecting information on North Korean defectors living across the border. Prosecutors accused Yoo of collecting information on at least 200 North Korean defectors living in the South, while he worked for the Seoul city government. Yoo maintained his innocence throughout his trial. However, his protestations appeared untenable once the South Korean prosecution produced a number of Chinese transit documents showing that he had entered North Korea repeatedly from China, ostensibly in order to transport information to his handlers in Pyongyang. However, in a dramatic turn of events, the case against Yoo collapsed in August of 2013 amidst allegations that some of the documents presented to the court by the prosecutors had been forged. It now appears that the forged documents, which were travel records allegedly issued by the Chinese government, had been given to the prosecution by South Korea’s National Intelligence Service (NIS). Earlier this week, a mid-ranking NIS officer wasdetained after Seoul’s Central District Court issued a warrant for his arrest on charges of producing the forgeries used in Yoo’s trial. The officer, identified in court documents only as “Kim”, is suspected of having collaborated with a Chinese national living in South Korea to obtain blank Chinese government-issued travel forms, which were then modified to frame Yoo during his trial for espionage. South Korean media report that the NIS officer is denying the allegations, claiming that he too had been duped by his Chinese asset who gave him the forms. He is now arguing that the asset was probably working for Chinese intelligence. Meanwhile, Yoo’s case is currently awaiting an appeals trial.

http://intelnews.org/2014/03/20/01-1440/

Watchdog to probe telecom retailers on personal data management

South Korea’s telecom watchdog said Thursday it has opened an investigation into mobile carriers’ retail shops across the country to root out any abuse of personal information.

The Korea Communications Commission’s move follows a series of alarming data leaks from mobile carriers amid increasingnumber of smartphone users.

Earlier this month, police in the southern city of Busan said it arrested a suspect for allegedly circulating 12.3 million pieces of personal data obtained from a hacker who is presumed to have acquired them from local telecom retailers and other financial companies. 

Police investigators in Incheon, west of Seoul, said earlier this month it has arrested three people, including a telemarketer, for reportedly sneaking out personal information of some 12 million customers of KT Corp.

“There have been several cases of personal data leakages from retailers,” said Oh Nam-seok, a policy official at the KCC. “The probe has no deadline, and every shop will be investigated.”

While South Korea’s telecom law requires that all subscription forms with personal information be discarded after being uploaded to computer servers, several retailers are said to have kept copies to use them for marketing purposes.

The KCC said it would impose fines of up to 30 million won ($27,907) on retailers who did not discard documents through random on-site inspections. They can also be prosecuted if they sold the data to a third party.

Retailers often keep the personal information documents as the country’s three mobile carriers use them to lure customers.

SK Telecom Co. currently accounts for more than half of the market, trailed by KT Corp. with 30 percent and LG Uplus Corp. with the remaining share. (Yonhap)

[Graphic News] NPS’ stock investment rises sharply

South Korea’s state-run pension fund increased the proportion of stock investment to about 30 percent of its assets last year, data showed Thursday.

The National Pension Service, the country’s top institutional investor, said it held stocks valued at 128.32 trillion won ($119.31 billion) at the end of last year, which accounted for 30.5 percent of its assets totaling 426.96 trillion won.

The portion of stock investment has been on a steady rise, reaching 23.11 percent, 23.46 percent and 26.69 percent, respectively, in 2010, 2011 and 2012, reflecting the pension fund’s shift toward a more aggressive investment strategy.

Korean consumers dumping TV sets for smartphones, tablets

More South Koreans are switching to smartphones and tablet PCs for their television viewing, with most having just one TV set at home, latest data showed Tuesday.

The findings by the Korea Information Society Development Institute showed that 76.6 percent of South Korean households had one TV set at home last year, up from 70.9 percent and 69.7 percent in 2012 and 2011, respectively.

The survey was conducted on approximately 5,000 households nationwide in 17 major cities, with researchers making door-to-door visits.

The trend coincided with the ending of analogue broadcasts in December 2012, according to the institute. Consumers apparently threw away their outdated TV sets without replacing them, opting to view programming on mobile devices instead, the institute said.

The number of smartphone users came to 37.88 million at the end of January among a population of around 50 million. (Yonhap)

USIM-embedded Samsung Gear 2 to be released

Samsung Electronics and SK Telecom are said to be in discussions to release a new standalone variant of the Samsung Gear 2, which will allow users to make calls without connecting to a smartphone. 

Samsung is planning to release the new smart watch equipped with a universal subscriber identity module, or USIM, through SK Telecom, Korea’s biggest telecommunications vendor, according to those close to the matter. 

One SK Telecom source said the new model would only be available in Korea for a while, but did not rule out the possibility of a release in other global markets. 

A Samsung official declined to comment on the release of the new variant of the Gear 2.

Shin Jong-kyun, chief executive officer of Samsung Electronics, speaks as he launches a new range of Galaxy Gear 2 and Gear Fit wearable devices and the Galaxy S5 smartphone in Barcelona in February. (Bloomberg)

Although the latest news about the smart watch was unexpected, industry officials said it was not a novel idea. 

“A smart watch equipped with a USIM card is not implausible,” said an industry source, adding that battery life would be an issue, since a watch equipped with an USIM card would consume more power.

Some handset makers, including LG Electronics, have already unveiled standalone watch phones.

LG Electronics released the Watch Phone, compatible with 3G networks, in 2009. 

The LG Watch Phone sported a camera and a 1.43 screen that allowed users to make and take voice and video calls and connect to the Internet, but only built-in applications were available. 

As there is also a camera mounted on the new Gear 2, users will likely be able to make video calls using the gadget. The Samsung Galaxy Gear and the initial version of its successor, Samsung Gear 2, must be Bluetooth-tethered to Galaxy smartphones for users to make phone calls. 

Samsung has been ratcheting up efforts to expand the wearable gadget market by unveiling a series of wearable gadgets, including Samsung Gear 2 and Samsung Gear Fit in February. 

The Korean tech company, which on Monday released the software development kit, or SDK, for its Tizen-based Gear 2 and Gear 2 Neo, expects application developers to roll out new apps to help build an ecosystem for wearables. 

The Samsung Gear 2, the Samsung Gear 2 Neo and Samsung Gear Fit are expected to hit the shelves as early as this month in the global market. 

Fast-growing Chinese IT firms increase clout in global market

The JD.com website is displayed on an Apple Inc. iPhone 5s on top of an Apple iPad displaying the Tencent Holdings website in this arranged photograph taken in Hong Kong earlier this year. (Bloomberg)

Rapidly growing Chinese IT firms are aggressively expanding their presence in the global market and are posing a challenge to IT giants such as Google and Facebook. 

Since its initial public offering in 2004, Tencent, a Chinese Web-portal operator, saw its market value increase more than 100-fold to $138 billion during the past 10 years. 

Tencent, which also runs the mobile messenger WeChat, has been flexing its muscles in the mobile messenger market, as it has a 14 percent stake in Kakao Corp. 

Kakao Corp. is the operator of Korea’s largest mobile messenger, Kakao Talk. Tencent is in a partnership with Google for promoting WeChat. 

The Chinese mobile messenger is considered one of the so-called big four in the mobile messenger market along with WhatsApp in the U.S., and Line and Kakao Talk in Korea.

The Chinese mobile service has 300 million monthly active users, the second highest after WhatsApp, which has 450 million, according to a report released by BNP Paribas, an international financial services firm.

Baidu, Alibaba following in Tencent’s footsteps

The stunning growth of the Chinese Internet firm is being followed by other Chinese IT goliaths with huge amounts of capital, including Baidu, a Web-search service provider, and Alibaba Group, an e-commerce business.

“Backed by the Chinese government, which has deployed exclusive policies towards foreign firms, Chinese IT companies have grown exponentially through aggressive M&As and investment. Now the scale is being tilted towards the Chinese competitors,” an industry source said.

Alibaba purchased 60 percent of the stock shares of ChinaVision Media Group, which was worth around 860 billion won ($803 million) last Wednesday. Baidu bought 91 Wireless, China’s largest app store, for 2 trillion won.

Alibaba and Baidu are also making forays into global markets by increasingly taking over and making investments in companies around the world.

In 2013 Alibaba spent 1.1 trillion won on M&A deals, which is 10 percent of its annual revenue of 8 trillion won, and acquired online shopping firm ShopRunner for 200 billion won, according to news reports.

The e-commerce giant is poised to throw its hat in the ring by launching online shopping website 11 Main in the U.S. as early as this year.

Baidu poured 830 billion won into M&As, amounting to 15 percent of its revenue of 5.5 trillion won last year.

In April, Baidu will open a research lab called Deep Learning in Cupertino, California, aiming to develop the world’s most advanced artificial intelligence technology.

The company is also said to be working on smart glasses with voice recognition and augmented reality technology.

The rising Chinese IT companies pose a threat to Korean Internet firms such as Naver and Daum, which are currently trying to break into the global market with a wide range of mobile services such as mobile messengers and mobile launchers.

“The situation will not likely be favorable for Korean Internet firms as they are stuck between global IT behemoths including Google, and Facebook, and those rising firms including Tencent and Alibaba,” an industry source said.

By Kim Young-won (wone0102@heraldcorp.com)

[Desk Column] Is Google being bullied in Korea?

Type in “Google payment system error” on any search engine here and you’ll get a long list of people complaining of payment disasters, both big and small.

The list comes complete with solutions from those who have been there and done it. Some offer sympathy, while yet others fume at the lack of compassion and knowledge on the part of the call center employees. But we all know it is not their fault. 

Most of the blame lies with the Ministry of Science, ICT and Future Planning, which authorized Google Payment Korea in the first place, even though Google had not met the preconditions. 

This is an indication that from the start, Korean officials had been ready to give privileges to the U.S. company, and it has touched off a recent investigation by the state auditor. 

As we all know, Google is a powerful business partner to Samsung, and it has been involved in a number of big projects with several ministries here, including the Science Ministry and the Culture Ministry. 

This leaves the question, what exactly is the nature of Google’s relationship with Korea? 

“I think there is a new message being sent out to Google,” said an anonymous source. 

The message is that the government will not be allowing any individual or company to get off scot free when discovered to have been involved in irregularities, and Google will be no exception. 

That explains the recent fines Google was slapped with for unauthorized information gathering. And not too many people may remember, but the fines went up an extra few notches because Google refused to cooperate. 

Some, however, believe Google may be being bullied, saying that the government, hand in hand with companies here that might not want Google to become a bigger presence, may be working together. 

Google certainly has been catching up as a search engine, as it is now more frequently referred to than Daum. 

But that’s not enough to tell the whole story. Google has yet to shed light on its closet full of skeletons, including the fact that no one knows exactly how much it pays in Korean taxes, despite ringing up annual sales of up to 400 billion won ($374 million). 

I do want to leave open the possibility that we may all be going overboard with the conspiracy theories, and this really is just a straightforward story about consumers seeking better services from a foreign company. 

So I guess we will see. In the meantime, it would help if Google would speak out about its stance on these and other controversial issues instead of evading the public and the media, saying it needs to get authorization from its headquarters. 

Second McDonald’s breakfast giveaway a success Quick service restaurant pioneer offers fresh and easy breakfast menu to busy Koreans

Joe Erlinger (left), managing director of McDonald’s Korea, and Bob Larson, greater Asia senior vice president of McDonald’s, pose with a giant Egg McMuffin during the National Breakfast Day event on Monday at the Gwanhun-dong branch. (McDonald’s Korea)

McDonald’s Korea on Monday held its second National Breakfast Day event during which some 300,000 Egg McMuffins -- McDonald’s iconic breakfast sandwiches -- were handed out for free at 300 outlets across the country. 

The event, which lasted from 7:00 to 10:00 a.m., was a huge success, with the food running out in just a couple of hours. 

Bob Larson talks to The Korea Herald at the company’s Gwanhun-dong restaurant in downtown Seoul on Monday. (McDonald’s Korea)

“The Korean consumers have high standard particularly towards quality and freshness of ingredients,” said Bob Larson, the greater Asia senior vice president of McDonald’s, in an interview with The Korea Herald. 

For example, Korea is one of the few countries where McDonald‘s operates that has the BLT Muffin on its breakfast menu with fresh lettuce and tomatoes. Also, some McCafes here have recently started serving tomato juice and mango frappes, becoming the world’s first to do so. 

“This was made available because we had an abundant choice in vegetables here, with local farmers being supportive. We also offer more protein and vitamins on our breakfast menu with freshly cracked eggs on our McMuffins, delivered in the freshest condition,” Larson said. 

According to the company, McDonald’s is already well-known for introducing excellent service in Korea, becoming a pioneer in the quick-service restaurant industry. 

In 2006, McDonald’s introduced the famous and popular McMorning breakfast, tailored to the busy lifestyles of Korean consumers, who are often tempted to skip breakfast. 

Other brands like Lotteria, Burger King and Dunkin’ Donuts have been following the lead of McDonald’s by offer more breakfast items at affordable prices.

In this sense, McDonald’s has been contributing greatly to the development of the breakfast business in Korea and creating an innovative new trend, according to Larson. 

McDonald’s Korea has made special efforts to please Korean customers, who can be pickier than most, including the introduction of Premium Roast Coffee made of 100% Arabica beans that are sold for just 1,000 won ($0.94) a cup. 

The Korean McDonald’s outlets held a “Free Coffee Day” event last week to promote the coffee. 

“We are hoping that both families and commuters will enjoy our menu. If there is a way to widen our access to them, we will take it,” Larson said, hinting that McDonald’s remains open to new ideas for satisfying customers here.

By Bae Ji-sook(baejisook@heraldcorp.com)

Korean manufacturers’ sentiment hits 3-year high

South Korean manufacturers appear to believe business conditions for the second quarter of this year will be better than the first, according to a recent poll by the Korea Chamber of Commerce and Industry.

The improving sentiment seemed to be largely fanned by expectations of a recovery in the U.S. economy and an improvement in the auto and IT industries, and reached a three-year high on par with the first quarter of 2011.

According to the poll of 2,425 companies by the KCCI, the Business Survey Index for the April-June period was tallied at 111, up 19 points from 92 the previous quarter.

A reading of above 100 on the index, which gauges corporate expectations of economic conditions, means optimists outnumber pessimists.

The index reached 111 in the first quarter of 2011, but had fallen below this benchmark since the third quarter of 2011.

“Sentiment among local manufacturers improved sharply on anticipation of a recovery in the U.S. economy and improved business conditions in the auto and IT industries, as well as the government’s economic plans,” the KCCI said.

(baejisook@heraldcorp.com)

SK Planet eyes Indonesia’s e-commerce market

Customers in Indonesia will soon have a faster, easier and much more entertaining open market experience thanks to SK Planet, Korea’s leading online and mobile service platform provider.

On Wednesday, the company announced the launch of its much-awaited open market Elevenia (www.elevenia.co.id) to make a foray into one of the fastest-growing countries in Southeast Asia.

Elevenia was created in partnership with Indonesia’s second-largest telecom operator, XL Axiata. 

The name was coined from the words “eleven” and “dunia.” “Dunia” means “globe” in Indonesian, and the name reflects SK Planet’s hopes to open up a world where sellers and buyers are individually connected, the Seoul-based company said.

SK Planet launched open market Elevenia in partnership with Indonesia’s second-largest telecom operator XL Axiata on Wednesday. ( SK Planet)

Elevenia was tailored on 11street, a popular online marketplace in Korea operated by SK Planet. The site garners an average 17 million visitors a month. 

SK Planet signed a deal with XL Axiata in May 2013 and set up the joint venture XL Planet a couple of months later in preparation for launching Elevenia. The two partners each hold a 50 percent stake.

XL Planet started out with 45 billion won ($42 million) in initial capital and around 100 employees. 

“SK Planet tapped into Indonesia’s e-commerce market early because of its high market potential and fast-growing Internet penetration. We will provide e-commerce services based on our 11street’s business expertise in mobile and online shopping,” said Lee Joon-sung, CEO of XL Planet.

SK Planet went on to say that Elevenia would allow consumers to buy goods on the Web as well as with their mobile phones. By partnering with local mobile carriers, it will enable users to shop on smartphones without data charges. 

Further, for the first time in Indonesia, Elevenia will provide 24-hour customer services to offer the utmost convenience for users, the Korean company said. 

A total of 550,000 products including fashion, cosmetics, kids’ products, electronic devices, household items, music and books will be offered on Elevenia. 

Sellers will also benefit from a free training package offered from three venues in Jakarta ― Kuningan, Tanah Abang and Mangga Dua. The package includes consulting on marketing, how to sell products on the open market and free photography services. 

Indonesia is viewed as a lucrative market for online commerce firms as the country’s Internet penetration reached 31 percent as of 2013. Mobile phone users accounted for more than two-thirds of the population. 

Consequently, the nation’s e-commerce market is expected to grow to $25 billion in 2016 from $8 billion in 2013, according to Indonesian e-Commerce provider Vela Asia. 

SK Planet was established in October 2011 as a wholly owned subsidiary of SK Telecom, the nation’s largest mobile carrier. Apart from 11street, it also boasts a strong reputation as a digital content provider. Its T Store, the nation’s largest mobile content market with 22 million subscribers, offers digital contents such as apps, games, films, TV programs and e-books. 

By Shin Ji-hye (shinjh@heraldcorp.com)