Lobbyist, Bank Chief Had Prior Links

Kim Jae-rok, the financial broker implicated in the ongoing lobbying scandal, was well acquainted with the former president of the Korea Exchange Bank, Lee Gang-won (Korea Investment Corporation), who masterminded the sale of the bank in 2003.

Kim worked at the Kia Economic Institute for three months as an executive in 1997, while Lee was the head of Kia-Ford Automotive Finance from 1995-1999. It is said that the two became acquainted at this time.

In 2002, Lee hired Investus Global, which Kim established, for consultation services on a possible merger between the Korea Exchange Bank and Seoul Bank. Lee paid Kim 110 million won in fees (including VAT).

At the time, the Korea Exchange Bank did not have the capacity to acquire another bank, but a proposal was made “for practice,” according to a former bank official. If this is true, the Korea Exchange Bank spent 110 million won on “practice.”

In 2002, Lee was unexpectedly selected as the president of the Korea Exchange Bank. Lee was previously the CEO of LG Fund, a small company. Rumors floated in the financial circles that Lee was heavily backed by figures from the Jeolla Province. Moreover, as Kim was closely acquainted with influential people from the Jeolla province during the Kim Dae-jung administration, the two men’s paths may have also crossed.

Lee is a part of the so-called “Lee Heon-jae association.” Kim is also known to be close to the former Finance minister Lee Heon-jae.

Donga Ilbo left a phone message with the former bank chief Lee asking for details, but the call was unreturned.

Do-Young Kim nirvana1@donga.com