Front-running presidential candidate Lee Myung-bak was Monday cleared of allegations that he was involved in a financial scam as prosecutors said they failed to secure evidence to prove Lee's involvement.
The announcement by the prosecution appeared to have removed the last hurdle for Lee of the major opposition Grand National Party toward the Dec. 19 vote as he enjoys a comfortable lead with an approval rating of around 40 percent in most recent public surveys.
Lee has been suspected of involvement in a 2001 scam in which his former business partner, Kim Kyung-joon, allegedly manipulated stock prices of his now-defunct asset management company BBK and embezzled company funds. Kim was accused of misappropriating company funds totaling 38 billion won ($42 million).
Kim, a Korean-American who fled to the United States in 2002 and was arrested in January 2004 in Los Angeles, was extradited to South Korea last month.
Prosecutors on Wednesday indicted Kim for alleged share rigging, fabrication of documents and other charges linked to the financial scam.
"Our special investigation team found no evidence to prove Lee rigged share prices in collusion with Kim," said Kim Hong-il, a senior prosecutor for the team.
Critics alleged the leading candidate to be involved in the financial scam, saying BBK was co-owned by Kim and Lee.
The partnership between Lee and Kim goes back to the late 1990s, a period of political inactivity for Lee, who resigned as CEO of Hyundai Construction and Engineering in 1987 and was elected as Seoul mayor in 2002.
The two co-founded an investment firm called LK-e Bank in 2000, a year after Kim launched a similar firm called BBK. Both firms functioned as a medium for the alleged share rigging and embezzlement by a third investment firm, called Optional Ventures Korea, which Kim launched in 2000.
"No circumstantial evidence is found yet, of whether Lee held the actual ownership of BBK," the prosecution official said.
The GNP candidate would not be prosecuted, prosecution officials said.
Opponents of Lee called on the prosecution Monday not to make an "obscure" announcement.
The pro-government United New Democratic Party said if the prosecution decides not to reveal the full extent of their investigation because of "political considerations," it will push for the establishment of an independent counsel to look into the issue.
Meanwhile, the sister of the Korean-American businessman, Erica Kim, is reported to hold a press briefing at Los Angeles early Thursday in Korean local time, refuting prosecutors. She is reported to have been the one who introduced her brother to Lee.
A note, written by Kim, who is detained by South Korean prosecutors, to his mother, was released to the local media Wednesday, saying that he has been told by prosecutors he will be given a commutation of sentence if he denies Lee's role in the scandal.
Prosecutors flatly denied Wednesday what was written on the note, saying Kim was the one who tried to make a 'deal.'
(Yonhap)