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Prosecution seeks to question key player in BBK scandal

South Korean prosecutors looking into controversial auto parts maker DAS, which many suspect of belonging to former President Lee Myung-bak for the purpose of embezzlement, are seeking to bring in a former aide to Lee for questioning, according to sources. The aide Kim Jae-soo served under the Lee administration as Los Angeles consul general and currently works as a lawyer in the US.

Former Los Angeles Consul General Kim Jae-soo. Yonhap
Former Los Angeles Consul General Kim Jae-soo. Yonhap

Kim, who has permanent residence in the US, allegedly meddled in a massive stock-rigging scandal by investment firm BBK that led to over 100 billion won ($94 million) in losses to thousands of investors in 2001.

Prosecutors suspect that Lee, while president, pressured government agencies, including the Ministry of Foreign Affairs, to coerce BBK to return part of the 19 billion won the auto parts maker had put into the investment firm.

BBK founder Kim Kyung-joon completed his eight-year prison term last year after being indicted on charges of stock price manipulation and embezzlement.

In 1999, DAS invested 19 billion won to establish BBK, which has since been disbanded. Two years later, the investment firm led stock rigging, causing 5,500 investors to lose about 100 billion won.

Prosecutors also aim to find out whether Lee was the de facto owner of DAS, and whether the previous president exercised authority to have the diplomat protect its funds in the BBK scandal.

Seoul Eastern District Prosecutors’ Office last month set up a team of 10 investigators to look into DAS.

Lee’s elder brother Lee Sang-eun is a major shareholder and the chairman of DAS, a parts supplier for Hyundai Motor Company that previously employed President Lee, but many have suspected the former president controlled the supplier, prompting the recent investigation.

By Bak Se-hwan (sh@heraldcorp.com)
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