POSCO on Friday denied a report that lawmaker Lee Sang-deuk, elder brother of President Lee Myung-bak, encouraged the steelmaker to make a failed investment in a savings bank two years ago.

POSTECH, a science and technology university affiliated to the Pohang-based firm, invested 50 billion won ($43.6 million) in Busan Savings Bank in June 2010.

Citing senior POSCO officials, the local daily Hankyoreh reported Friday that Lee requested the investment to POSCO chairman Chung Joon-yang and the school’s board chairman Lee Ku-taek.

The operation of the secondary lender was suspended in February 2011 due to its failure to meet equity capital requirement, resulting in a write-off of the steelmaker’s investment.

POSCO denied the report.

“The investment was made according to POSTECH’s own decision making process,” it said in a statement. The company said it is considering legal action against the newspaper and reporter.

Lee, a six-term lawmaker, has been implicated in a series of other corruption scandals.

(heeshin@heraldcorp.com)