The prosecution said Tuesday that it had cleared former president Lee Myung-bak of the allegations that he provided the Australia-based Macquarie Korea Infrastructure Fund with preferential treatment while he was Seoul mayor.

A month ago, two consumer advocate groups filed a complaint with the investigative agency against Lee, saying that “former president Lee, during his time as mayor, inflicted great losses on Seoulites by signing an irregular contract with a key shareholder of the Seoul Subway Line 9.”

Lee had allowed Macquarie Korea Infrastructure Fund, an equity investor as then second-largest shareholder of Seoul Subway Line 9, to charge fares of 1,000 won a passenger though the other bidder proposed 700 won, according to the Citizens’ Coalition for Economic Justice and Spec Watch Korea.

Lee had also let the firm avoid risk by obliging the city to cover a certain amount of losses each year, the civic groups claimed.

In the wake of the behind-the-scenes deal, the city has accrued losses of 126.7 billion won in the four years since the subway line began operations in 2009, they said.

However, the Seoul Central District Prosecutors’ Office said that it had not found the deal between the city and the investment firm to be as lopsided as the group had claimed.

Meanwhile, Lee has faced multiple accusations leveled by local civic groups since leaving the Presidential Office in February 2013.

While the prosecution said it had found him not guilty of irregularities in purchasing a plot of land in southern Seoul for a private home, he still faces charges of inflicting massive losses on the state in a botched attempt at refurbishing the nation’s four major rivers during his presidency.

By Kim Yon-se and news reports
(kys@heraldcorp.com)