Korea Development Bank Helped Issuing Lee`s Convertible Bonds

The Korea Development Bank (KDB) was reportedly to have helped, when Samae Shilup (the former Samae Industrial. Co. Ltd.), in which Lee Yong-Ho is the majority shareholder, issued the overseas convertible bonds through expedient means last year.

According to the Prosecution and the financial circle yesterday, Samae Shilup pretended as if it was issuing the convertible bonds to the foreign investors last October, while in fact they were concluding a prior contract in which the KDB was to take over 9million dollars.

The Prosecution announced in the written arraignment that Samae Shilup pretended as if it sold the overseas convertible bonds amounting to 9million dollars to the Nomura Securities` Hong Kong branch and the Nitan AP` Singapore branch, respectively, last October, whereas the KDB in fact took over the whole amount a week later, November 2nd through 15th.

Samae Shilup used such a method to raise the stock prices by showing as if it had international trust. In other words, it was an investment allure by using `foreigners with black hair`.

An official at the securities company said, ``As the KDB was to take over the whole amount, the foreigner investors must have easily agreed to lend their account name. It is highly possible that the KDB knew the expedient way of issuing the bonds when it was involved.``

The convertible bonds which the KDB took over was re-bought by the Paper Company which Lee Yong-Ho established, and Lee made a huge profit by transferring the convertible bonds to stocks after having increased the stock prices through treasure ship and the like. It was reported that part of the convertible bonds was used for the lobby activities in political circles.

Regarding this, the KDB said that ``the transaction was a normal one made under the business judgment in order to gain the profit at the usual securities market. As the transaction took place much before the stock prices of Samae Shilup skyrocketed, it was not the transaction by the external pressure or lobby activities.``

Park Hyeon-Jin witness@donga.com