Tax agency also searched auto parts maker seizing financial documents to prove ownership
By Lee Kyung-min
The prosecution is stepping up its investigation into DAS to discern whether former President Lee Myung-bak was the de facto owner of the auto parts maker and whether he embezzled 12 billion won in company funds.
Investigators have interrogated former employees of the automotive company to find out who actually owns it, while tax officials searched its offices to seize computer files and other financial documents.
While former President Lee has long claimed the auto parts manufacturer belonged to his older brother, few believe his claim in light of evidence indicating otherwise.
DAS was one of the few investors that avoided financial damage in a massive stock-rigging scandal that caused over 100 billion won ($94 million) in losses to about 5,500 investors in 2001.
Suspicion is that unlike other regular investors, DAS got its 19 billion won investment back in full after Lee abused the power of the presidential office after taking power in 2008.
The much-politicized investigation, which the conservative bloc characterized as a "political vendetta," will clarify whether Lee controlled DAS and whether he created a slush fund.
Investigators will also determine whether Lee abused his power with the Ministry of Foreign Affairs and National Tax Service (NTS) among other agencies to get back his investment in full.
About 40 NTS investigators searched the company headquarters and factories in Gyeongju, North Gyeongsang Province, Thursday, to secure computer hard drives and accounting books.
More than 20 investigators searched the local branch of the company in Asan, South Chungcheong Province, to secure accounting books and related documents.
The Seoul Eastern District Prosecutors' Office is looking into Jeong Ho-young, a special counsel who led the investigation into DAS in 2008, following allegations he deliberately failed to dig deeper into the case, for which he could face charges of dereliction of duty. Despite knowing a female worker at DAS embezzled 12 billion won of company funds, Jeong failed to question her or any other company officials on where she secured such a large amount of money and whether she was under orders from higher-ranking company officials.
The prosecution recently secured statements from a man who worked as a chauffeur for the ex-president's older brother Lee Sang-eun for over 10 years claiming Lee Myung-bak was the owner of DAS.
The Seoul Central District Prosecutors' Office launched an investigation into a case filed by a man surnamed Jang, one of many victims, against the former president and former Los Angeles Consul General Kim Jae-soo who served under the Lee administration. In the complaint, Jang said Kim failed to return 37.1 billion won he invested while Lee had his investment returned.
DAS, ostensibly owned by Lee Sang-eun, put up 19 billion won to set up the investment consulting company BBK, managed by Kim Kyung-jun in 1999. Following a stock-rigging scam that deceived 5,500 investors two years later, Kim left the country with 38 billion won in embezzled BBK funds.
Most of the victims lost their money, but only those close to Lee had their money returned including DAS which received 5 billion won, about a quarter of its initial investment. Amid a civil suit filed by many victims against BBK seeking compensation, Kim only gave DAS the remaining 14 billion won, returning the full amount of investment.
This, according to prosecutors, was the result of Lee mobilizing government agencies to pressure Kim, which would be a criminal act of abusing the power of the presidential office. The prosecution suspects the involvement of the foreign ministry, given Kim transferred the money from his Swiss bank account.
During the 2007 presidential election, the DAS slush fund scandal nearly cost Lee his election, but he managed to win after Jeong cleared him of any wrongdoing. Three additional investigations all failed to conclude Lee was involved in the scam, all but increasing public skepticism of the investigative authorities.
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