Lee Confirmed “Kim Kyung-joon Founded BBK” Prior to Kwangwoon Lecture

A video clip is refueling the dying BBK scandal that has engulfed the whole country for the past six months. The clip features Grand National Party (GNP) candidate Lee Myung-bak giving a speech at Kwangwoon University on October 17, 2000. Addressing the crowd, Lee said, “I founded the BBK in this January.”

During interviews with the press both before and after the speech, however, Lee either said that Kim Kyung-joon (now waiting for trial behind bars) founded the investment consulting firm known as BBK, or did not explicitly expressed who founded it. He gave different foundation dates on different occasions.

“Kim Kyung-joon Founded BBK,” stressed Lee in some interviews–

Lee forfeited his congressional seat for violations of the Korean election law. He stayed in the Untied States for some time thereafter. Then he returned and started a cyber-financing partnership with Kim Kyung-joon. After getting a preliminary permit for the foundation of an e-bank from the Financial Supervisory Service, he began to publicly comment on the BBK since October 2000. In the course of the interviews, he gave a speech at the university.

During his interview published on the October 16 issue of Dong-A Ilbo, Lee told, “I wanted to introduce a new system and financial techniques,” explaining the reason for the foundation of the e-bank. He went on to explain how he would use the technique of arbitrage to generate profits from the very beginning. In the process, he mentioned Kim Kyung-joon and the BBK. Specifically, Lee said, “After establishment of BBK last year (1999), Kim Kyung-joon generated a 28.8 percent return on investment through arbitrage when the stock index dropped 60 points.” It is true that the BBK was founded in April 1999.

On the same day, Lee also said in an interview with the JoongAng Ilbo, “My new venture may feel unfamiliar to Koreans. I will demonstrate how advanced technology can advance the securities industry. Earlier this year, I founded LKe Bank to develop financial software and BBK to manage assets.” On the surface, it seems unclear who founded BBK. Lee’s comments differ at different interviews on the foundation date of the BBK.

One video clip: “The BBK was founded in January 2000”–

On October 17, one day after interviews with Dong-A Ilbo and JoongAng Ilbo, Lee addressed a class at Kwangwoon University and said, “I founded an Internet bank upon my return. To facilitate my new venture, I also founded the consulting company BBK in January 2000. We made preparations to obtain a license for the BBK to conduct investment consulting activities.” Lee added, “Our application is pending approval. A few days ago, we got the preliminary license.”

In short, Lee had gone through the following procedure: review of plausibility of the Internet financing venture -> filing of an application for the foundation of an e-bank -> obtainment of a preliminary license. This process matched what Lee had explained during both interviews and the videotaped lecture. The problem lies in the vague expressions that might trigger different interpretations of the founder and the foundation date.

GNP Clean Politics Chairman Hong Joon-pyo explained, “Lee must have used his own name to promote the new company BBK since his name was better known among the Koreans.”

Lee’s comments during the October 16 Dong-A Ilbo interview also contradict his comments during the lecture. In the former, he said that BBK reaped a 28.8 percent return after its foundation in 1999. During the latter, however, he expressed that the BBK was founded that year (i.e. 2000) and generated 28.8 percent return as of September that year.

ddr@donga.com