Bank Probe Splits Court, Prosecutors

“The court’s decision is an insult to securities industry,” said Chae Dong-wook, prosecutor of the Central Investigation Bureau at the Supreme Prosecutor’s Office.

“Prosecutors should have better knowledge of civil law as well as commercial law,” according to Min Byung-hoon, chief judge of the Seoul Central District Court.

Even on a holiday, November 5, the court and the prosecutors criticized each other harshly over issues including Lone Star arrests and warrant request rejection. Prosecutor Chae, who is in charge of the investigation, and Chief Judge Min, the one who turned down the warrant, spoke on behalf of the SPO and the court, respectively.

The court even said that prosecutors are manipulating the public on certain intentions outside of the court, just ahead of the schedules including the warrant issuance of former KEB President Lee Kang-won on November 6, and also a reapplied arrest warrant requests by prosecutors on November 7.”

-Prosecutors take offense over court’s rejection

At a briefing held by Prosecutor Chae on the morning of November 5, Chae refuted the reasons for the court’s rejection of arrest warrants for Lone Star Vice Chairman Ellis Short, general counsel Michael Thompson, and Yoo Hoi-won, president of Lone Star Advisors Korea.

Chae went over a 13 page long refutation and condemned the court by saying, “It is regrettable that the incident might give people an impression of a legal conflict between the court and prosecutors. Considering the importance of this incident, however, the people’s right to know comes before any other value.” The court suggested of conducting a separate investigation, which arrests the suspect on a secondary reason and investigates the primary case. Prosecutor Chae, however, criticized, “Manipulating stock prices is a huge crime by itself,” and interpreted the court’s suggestion as “a lack of understanding.”

Court: “Persuade judges first before asking for warrant issuance”-

About an hour after Prosecutor Chae’s briefing yesterday, Chief Judge Min visited the SPO’s press conference room at 2 p.m. and blasted the briefing in return for about 40 minutes.

“Prosecutors should study civil and commercial law,” Min criticized. “They shift the responsibility on the court’s shoulder whenever they fail in their investigation, which seems only as a justification of their lack of ability.” He claimed that prosecutors are taking an active role in the court by intention. “The pressure of investigation has led them to go too far.”

Min stated, “It has been clarified that Loan Star disseminated false information on the capital reduction in KEB’s credit card business. However, prosecutors did not give any explanation on the level of involvement of President Yoo’s crime,” and added, “Given the lack of explanation, how could we issue any arrest warrants?” he asked.

Regarding the dispute over the effectiveness of warrant issuance, he said, “The arrest warrant submitted by the prosecutors did not say anything about criminal extraction,” and added he was not sure “why prosecutors need an arrest warrant if they are not going to request the extradition right away.”

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