Police Tracing Ex-Minister’s Accounts

Prosecutors under the investigation into the scandals of Lone Star, the U.S.-based fund company, over the acquisition of the Korea Exchange Bank (KEB) below market price, have embarked on tracking the bank account of Lee Hun-jae, the former minister of finance and economy. Lee was then executive advisor of the Kim & Chang law firm, which was in charge of legal advice to Lone Star that took over KEB in 2003.

The central investigation division at the Prosecutor General’s Office is reportedly scrutinizing relevant evidence collected from KEB’s branch in Hannam-dong, Seoul, where Lee borrowed one billion won in 2002 and refunded the loan in 2003 and 2004.

The Prosecution casts suspicion on a source of the money used by Lee to pay back the loan and have acquired a seizure and search warrant issued by the court in an effort to track the source.

The investigation reportedly includes not only Lee’s bank accounts but also those of Lee Kang-won, the former president of KEB, Lee Dal-ryong, ex-vice president of KEB, and Shin Jae-ha, head of Bogo investment.

It is set to investigate whether the ex-minister of finance and economy exerted influence over the high-ranking officials of the Ministry of Finance and Economy and the Financial Supervisory Commission, who are to be held responsible for the acquisition process.

The Prosecution is scheduled to kick off their investigation in earnest after the Board of Audit and Inspection reveals the results of its audit on this matter.

Tae-Hoon Lee jefflee@donga.com needjung@donga.com