Firm tied to Lee Myung-bak targeted for investigation
A truck moves out of the head office of DAS in Gyeongju, North Gyeongsang Province, Tuesday. / Yonhap
By Kim Hyo-jin
Lee Myung-bak
DAS, a car parts maker tied to former President Lee Myung-bak, is back in the spotlight as the prosecution is set to re-investigate suspicions surrounding the company.
DAS is officially owned by Lee’s eldest brother Sang-eun, but there have been suspicions the brother is only a proxy, and the real owner is the former president. The company was involved in the BBK stock price manipulation scandal in 2001.
The ruling Democratic Party of Korea (DPK) raised suspicions the Export-Import Bank of Korea (Eximbank) had given special favors to the company under the Lee government during a recent National Assembly audit.
The move is in line with the Moon Jae-in government’s push to eradicate longstanding social evils, which he believes were largely committed under his two conservative predecessors, Lee and Park Geun-hye.
“If it is found that Lee was involved in retrieving the investment from BBK, it could give momentum for the prosecution to dig deeper into allegations of his abuse of power,” a DPK lawmaker said.
DAS invested 19 billion won ($16.8 million) in the establishment of investment consulting company BBK in 1999. BBK caused 5,500 investors to lose about 100 billion won through stock rigging in 2001.
While the victims were engaged in a lawsuit against BBK, DAS received 14 billion won ($12.4 million) in damages from BBK President Kim Kyung-joon, through his personal Swiss bank account.
During the 2007 presidential election, attention was paid to the scandal and Lee, then-presidential candidate of the Grand National Party, was accused of creating a slush fund through the financial scam and being the de facto owner of BBK and DAS.
Later in the year, the prosecution concluded there was no evidence to prove the allegation against Lee, but suspicions still lingered among some people.
The scandal has recently resurfaced as Jang Yong-hun, president of Optional Capital, formerly called Optional Ventures, and a victim of the stock manipulation, filed a complaint with the prosecution against Lee and Kim Jae-su, former consul general to Los Angeles on Oct. 17.
Jang claimed DAS pocketed the compensation Optional Capital was supposed to receive, and in this process Lee exerted influence on Kim Kyung-joon through Kim Jae-su.
Seoul Central District Prosecutors’ Office said it will reopen the investigation into DAS.
Meanwhile, DPK lawmakers raised suspicions Lee was the real owner of DAS given that the company enjoyed special loans from the Export Import Bank of Korea despite its poor performance during Lee’s term.
Rep. Park Young-sun pointed out its inappropriate treatment based on the fact the bank has kept the interest rate low for the last 12 years even while credit risk was growing high.
She also claimed the bank gave additional favors by allowing the company to pay inheritance tax with unlisted stocks after DAS former owner Kim Jae-jung, Lee’s brother-in-law, died in 2010.
Rep. Kim Jung-woo also claimed DAS was unfairly selected as a company to receive government support in 2010 even though its assessment score was the lowest of 43 applicants.