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Growing Controversy over BBK Scandal upon Kim`s Return

Posted November. 17, 2007 08:45,   

한국어

There are growing concerns over alleged ties between Grand National Party (GNP) presidential candidate Lee Myung-bak and his former business partner Kim Gyeong-jun (41) as Kim, the prime suspect in the BBK fraud case implicating Lee, arrived in Seoul yesterday. In the face of the prosecutors’ investigation into Kim, this newspaper addresses some major points.

Is Lee Myung-bak the Real Owner of DAS?-

BBK was founded by Kim Gyeong-jun as an asset management firm in 1999, and on paper, he is the president of the firm. However, in a recent interview with a newspaper, Kim said, “The Grand National Party`s presidential candidate, Lee Myung-bak, is the real owner of (BBK), who holds 100 percent of the equity. I have a double contract.” He added, “The huge investment of 19 billion won of DAS to BBK would be impossible without Lee.”

In effect, DAS invested a total of 19 billion won to BBK between March and December in 2000. At that time, the ruling camp raised suspicions over Lee Myung-Bak’s ownership of the company, curious that a company with an annual net profit of three billion won could make an investment six times more than its net revenues.”

Regarding this allegation, the Lee camp said, “In a report signed and submitted by Kim himself to the Financial Supervisory Service in March 2001, Kim clearly stated that he held a 100 percent stake of BBK. Some newspapers reported that I am the founder of BBK, but that is groundless.” He also argued that he had no idea how DAS invested in BBK.

Is Lee the Victim or the Accomplice of the Stock Manipulation?-

After the closure of BBK, Kim took over Gwangun Venture Business Inc., which later changed its name to Optional Ventures & Co. Afterward, under the name of eight foreign entities, Kim snapped up stocks, spreading the news that foreign investors were buying stocks of Optional Ventures Korea. Shortly after, the stock prices of the firm quadrupled.

In this procedure, Kim embezzled 38.4 billion won in corporate funds and fled to the U.S. The point of contention is that Kim illegally raised the stock prices of Optional Ventures Korea by employing bank accounts of LKe Bank and BBK companies.

The United New Democratic Party (UNDP) insists that GNP presidential contender Lee is highly likely to have colluded with Kim since Lee is suspicious of having equity of BBK and that LKe was co-founded by Lee and Kim in February 2000.

Meanwhile, the GNP argued, “The presidential nominee ended his partnership with Kim prior to the establishment of Optional Ventures Korea. Kim is responsible for using illegal offshore funds.”

Why Did Kim Return Ahead of the Presidential Election?

Kim recently dropped his appeal in which he had applied for protection not to be repatriated to Korea for the last three years. In an interview, he said, “If Lee is elected president, the condition will be unfavorable for me as he tries to punish me as he wishes. Returning to Korea prior to the election will provide fairer justice for my lawsuit.”

Concerning this remark, the GNP speculates that Kim may have been placated by the ruling camp to return earlier before his expulsion next July in exchange for a reduction of his sentence terms.

When Will the Prosecution Release its Investigation Results?-

If Kim is arrested on or around November 18, the prosecution would be able to indict him either on November 27 or December 7. Suspicions regarding Kim are likely to be confirmed at the time of indictment, and then allegations implicating Lee Myung-bak would be partly resolved.

However, it is still unknown whether the prosecution released its results as it did in the process of the GNP primary election in this August. This may be because it could take longer to resolve the allegations implicating Lee.

After all, Prosecutor General Lim Chae-jin, who will begin his new position on November 24, is expected to determine the date of the investigation release. When asked if the investigation results would be released before November 25, the candidate registration date, Lim said at a National Assembly confirmation hearing, “I will decide according to the conditions and situation of the probe.”



needjung@donga.com