Senior prosecutor Kim Hong-il announces the prosecution’s probe result that cleared Grand National Party presidential candidate Lee Myung-bak of his alleged involvement in a financial scam, at the Seoul Central District Prosecutors’ Office, southern Seoul, Wednesday. / Korea Times Photo by Ryu Hyo-jin

Other Candidates Seek Special Prosecutor for Reinvestigation

By Kim Rahn
Staff Reporter

Grand National Party (GNP) presidential candidate Lee Myung-bak was cleared Wednesday of almost all allegations linked to a financial scam perpetrated by his former business partner, but rival candidates denounced the prosecution's announcement on the former Seoul mayor, calling its investigation biased.

They said they plan to hold street rallies and seek legislation to introduce an independent counsel for a further investigation.

The reaction came after the prosecution cleared Lee of the key allegations of stock manipulation for undue capital gain and owning the asset management firm BBK, as had been claimed by his former business partner Kim Kyung-joon.

Kim is already under arrest on charges of share rigging and corporate fund embezzlement while running BBK and Optional Ventures Korea.

The prosecution concluded that the alleged ``side contract'' with Lee's personal stamp on it showing he sold his BBK shares to Kim for five billion won was a forgery.

It also said it could find no concrete evidence that Lee was the owner of DAS, a company run by his brother and brother-in-law, which invested a huge sum in BBK. ``No money was transferred from DAS to Lee. DAS' investment of 19 billion won in BBK was also made through its own decision without Lee's involvement,'' Kim Hong-il, a senior prosecutor in charge of the probe, said in a nationally televised press conference.

All former BBK workers testified that they purchased or sold stocks under Kim's order, without Lee's participation in any transactions, he added.

According to the prosecutor, Kim also changed his claims about the ownership of BBK _ earlier he claimed that Lee was the real owner, but later said he held all the shares of the firm. Prosecutors also found a note handwritten by Kim that he held all BBK shares.

About the alleged side contract, the senior prosecutor said: ``In February 2000 when the contract was allegedly made, Lee was not holding any shares of BBK, and so was unable to sell any stock. Lee also did not receive the five billion won mentioned in the contract.''

The contract, which was poorly made and lacked signatures, was a forgery with a stamp different from Lee's, the prosecution concluded. ``At the beginning of the probe, Kim claimed the contract was authentic. But as we showed evidence against the claim, he confessed he forged the contract in March 2001, about a year later than the date written on it,'' the prosecutor said.

Concluding the probe, the prosecution indicted Kim on charges of embezzling 39 billion won in company funds, manipulating stock prices, and forging seven U.S. passports and 19 other documents.

The frontrunner welcomed the announcement and demanded that the pro-government United New Democratic Party (UNDP) and its candidate make a formal apology for their false claims.

UNDP candidate Chung Dong-young suspended his campaign tour to protest the prosecution's announcement and the party staged a street rally in downtown Seoul.

Kim Hyun-mee, the spokeswoman for the UNDP said, `` We will fight alongside citizens against the politicized prosecution and the `corrupt' politician.''

According to a magazine report Tuesday, Kim allegedly insisted in a secret memo delivered to his mother that prosecutors had proposed a plea bargain in return for not revealing Lee's involvement in the financial scam.

The campaign headquarters for independent candidate Lee Hoi-chang also said they will join the UNDP in its campaign to denounce the prosecution and its alleged collusion with the GNP.

The camp urged the GNP candidate to step down as a candidate and the prosecution to apologize to the public for its ``politically-charged'' unfair investigation.

``The prosecution has become a spokesperson for Lee Myung-bak,'' said Rep. Koak Sung-moon, a close aide to Lee Hoi-chang. ``The prosecution must brace for public revolt,'' he added.

rahnita@koreatimes.co.kr