Key figure in BBK stock fraud scandal returns to Korea

Speculation is mounting over the surprise return to Korea and ensuing probe into Erica Kim, 47, the older sister of imprisoned former BBK CEO Kim Kyung-joon, 45.

The BBK scandal involved stock price manipulation and was legally concluded after prosecutors and an independent counsel conducted probes in 2007 and 2008. The Supreme Court eventually found Kim Kyung-joon guilty and sentenced him to eight years in prison.

The case has received renewed attention, however, with the return of Erica Kim. She had made a bombshell allegation that BBK was owned by Lee Myung-bak, then the presidential candidate of the Grand National Party.

In two days of questioning by prosecutors Friday and Saturday, Erica Kim admitted to making false accusations that Lee was the real owner of BBK in the 2007 presidential election, a violation of public election law. She thus admitted that she lied that Lee owned BBK.

Erica Kim denied, however, that she manipulated stock prices and embezzled from Optional Ventures, a case in which she herself is the primary suspect, saying, “I had nothing to do with it.”

Sources in and outside of the prosecution say this testimony could be related to her sudden return to Korea. They say she might be trying to appeal to the Lee administration for lenience by admitting that she and her brother made false allegations against President Lee.

She might also seek to make clear that her brother, who “has nothing more to lose” after being found guilty, will take responsibility for stock price manipulation and embezzlement charges, which entail a heavier punishment than making false accusations.

Others say, however, that Erica Kim returned to Korea to seek her brother’s early release from prison. Since being extradited from the U.S. to Korea and arrested in November 2007, Kim Kyung-joon has served three years and three months in prison, which is less than half of his term.

If he is not granted a reduced sentence or pardon, he is set for release in November 2015.

For Erica Kim to make a comeback, pundits say she must conclude pending civil and criminal cases in Korea and overseas. She is being sued by DAS, an automotive parts manufacturer reportedly owned by President Lee’s elder brother, at a Los Angeles appellate court.

DAS sought 19 billion won (17 million U.S. dollars) in reimbursement of its investment from Erica Kim and her brother but a lower court ruled against the company.

Her brother also wrote in November last year handwritten documents amounting to dozens of pages that suggested DAS’s real owner is President Lee. Kim Kyung-joon said the president himself should appear in court in person and submitted the documents to the court.

Observers say Erica Kim might have returned to Korea to acquire the necessary materials for the trials and secure a court ruling in her favor to use in her civil case. In the same context, rumors say she also returned to Korea with her fiancé for business, namely supplying merchandise to a large domestic distributor here.

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