After questioning a former deputy prime minister, prosecutors failed to find any proof of his alleged role in Lone Star Funds' acquisition of Korea Exchange Bank (KEB) at a below-market price, a senior prosecutor said Monday.
The prosecution questioned Lee Hun-jai, 62, on Thursday on allegations that he used his undue influence on key financial officials to help the bidder buy a majority stake in South Korea's fifth-largest lender in 2003.
He was an advisor for Kim & Chang, a Seoul-based law firm that worked for Lone Star at that time, and served as a deputy prime minister the following two years.
"We have detected no specific criminal charges against him," said Chae Dong-wook, a senior prosecutor at the Supreme Prosecutors' Office. The conclusion led the prosecution to lift an overseas travel ban imposed on him almost six months ago, the prosecutor added.
Almost nine months after they began investigating the U.S. private equity fund company, prosecutors tentatively concluded earlier this week that the financial problems of KEB were deliberately inflated to help facilitate the bank's sale to the Dallas-based firm.
Prosecutors said Byeon Yang-ho, a former head of the Finance and Economy Ministry's financial policy bureau, masterminded the discount sale in collusion with Lee Kang-won, then president of the KEB. However, a Seoul court has twice rejected a request by prosecutors to arrest him, citing a lack of compelling evidence.
Prosecutors have also failed to prove suspicions that Lone Star bribed South Korea's financial regulators and government officials, including Byeon, through its alleged lobbyist Ha Jong-sun, to get approval for the bank takeover.
The Hyundai Marine and Fire Insurance president was arrested last month on charges of accepting $1.05 million from Lone Star in 2003, when he was working as a legal advisor for the company in return for his lobbying activities.
"It's not easy for us to prove Lone Star's executives were accomplices in the influence-peddling, at the current level of investigation," Chae said.
Lone Star is separately 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 said the deal incurred about 22.6 billion won in losses to the card company's smaller shareholders.
The prosecution is expected to announce an interim report on the Lone Star case in the middle of this month.
Seoul, Dec. 4 (Yonhap News)
Prosecutors clear former deputy prime minister of involvement in Lone Star case |
