Prosecutors again requested an arrest warrant for a former South Korean financial policymaker Monday for his alleged collusion in the undervaluing of Korea Exchange Bank (KEB) in 2003 to facilitate its takeover by U.S. equity fund Lone Star.
The action comes two weeks after a local court turned down the prosecution's warrant request for Byeon Yang-ho, 52, saying he was not feared to destroy evidence or run away.
Byeon, the former head of the Finance-Economy Ministry's financial policy bureau, is suspected of colluding with Lee Kang-won, the jailed former president of KEB, to understate the financial value of the bank to help facilitate the bank sale.
In return for his alleged collusion, Byeon was able to attract an investment of 40 billion won from KEB to Vogo Investment, which he now heads, prosecutors claimed.
Prosecutors added bribery charges in the new application for a warrant, Chae Dong-wook, a senior prosecutor at the Supreme Prosecutors' Office, told reporters.
"We found new proof showing Byeon tried to destroy evidence," Chae said.
The Dallas, Texas-based fund has been under investigation by prosecutors since March over allegations that it illegally lobbied South Korea's financial policymakers and former bank executives to allow it to buy a majority stake in the troubled bank through a deliberate exaggeration of its poor financial condition.
Lone Star is also suspected of manipulating the stock price of KEB's credit card arm after taking over the bank in order to cut the cost of the lender's merger with the card company.
Prosecutors say the deal incurred about 22.6 billion won in losses to the card company's smaller shareholders.
Seoul, Nov. 27 (Yonhap News)
Prosecutors again seek warrant for former financial official in Lone Star probe |
