hankyoreh

The photocopied page of a Korean-language side agreement that Lee Bo-ra, the wife of BBK figure Kim Kyung-jun, revealed briefly on November 21 in Los Angeles, shows that Grand National Party presidential candidate Lee Myung-bak sold his stake in investment advisory company BBK to Kim. The document, which was signed by the two key figures, is expected to provide a crucial evidence proving who has been lying about the stock scandal. The original copy will be submitted to the prosecution by Kim’s mother later today.

In addition, the three English-language side agreements between Lee and his former business partner were contracts for stock purchases in A.M. Pappas, sales of stock in LK e-Bank and stock subscriptions. Kim Young-ae, the mother of Kim Kyung-joon, will arrive at Incheon International Airport at around 6:00 a.m. (KST) on November 23 to submit the four original copies of the documents to the prosecution. If prosecutors are able to confirm whether the documents are genuine or not, it is possible that the truth of the BBK case will be known.

With less than a month before the presidential election, interest in the BBK case has intensified as questions about the involvement of Lee Myung-bak, the clear leader since he won the conservative party’s nomination in August, have begun to pile up.

The GNP presidential candidate has denied he was involved in Kim’s alleged stock manipulation activities at BBK. Kim, a Korean-American, returned from the United States after abandoning his fight against extradition, and was formally arrested last week on charges of stock price manipulation, embezzlement and document forgery and he is currently undergoing questioning by the prosecution.

Kim and Lee formed a partnership and invested an equal amount of money to open LK e-Bank in February 2000, after which the asset management firm BBK was launched. It is alleged that Kim manipulated BBK’s share prices and then embezzled 38.4 billion won from the company before it went bankrupt in April 2001. Kim then fled to the United States, where he was arrested in 2004. Lee, meanwhile, opened the firm Optional Ventures in April 2001, the same month in which BBK went out of business. Optional Ventures, along with LK e-Bank, served as a holding company for BBK. Lee also started two other firms, MAF and A.M. Pappas, in which LK e-Bank invested and which in turn fed BBK.

On November 22, Erica Kim, the Los Angeles-based elder sister of Kim, showed the four “genuine” documents to a Hankyoreh correspondent. The Korean-language agreement was written on February 21, 2000, and the three English-language agreements were written on February 21, 2001. The Korean-language agreement was marked with two stamps, one each from Lee and Kim. The English-language agreements were signed by three to five people, including Lee and Kim.

Titled “stock sale contract,” the two-page, A4-sized Korean-language agreement states that a “seller, Lee Myung-bak,” sold 610,000 shares in BBK to LK e-Bank President Kim Kyung-jun for 4,999,995,000 won (US$5,358,822). If the document is genuine, it will mean that Lee was the real owner of BBK until February 21, 2001, as Kim has claimed.

This will deal a serious blow to Lee’s election campaign, as his approval ratings have been on the decline since the allegations in the BBK case have grown and public confidence in him may drop even further if he is believed to have lied about his involvement. In contrast, if the contract is found to have been forged, Lee will finally be cleared of all charges in the stock fraud scandal.

The three English-language agreements consist of a contract for the purchase of stock between Lee Myung-bak, Kim Kyung-joon and A.M. Pappas; a contract for the sale of stock between Lee Myung-bak, Kim Kyung-joon, Erica Kim, Christopher Kim and LK e-Bank; and a contract for stock subscription between Lee Myung-bak, Kim Kyung-joon and LK e-Bank. The three documents total 50 pages in all. According to the documents, Lee and Kim set up e-Bank Stock Brokerage after selling their stakes in LK e-Bank to A.M. Pappas. Main shareholders of the e-Bank Stock Brokerage firm also bought shares of LK e-Bank, reflecting the common practice of cross-shareholding.

Rep. Park Hyung-joon, a GNP spokesman, said, “According to documents that Kim Kyung-jun submitted to the Namdaemun tax office, the company Ecapital owned 600,000 shares of BBK until May 9, 2000. So, in February 21, 2000, when the side agreements were reported to have been written, Lee owned no shares in BBK and had nothing to sell.” He said, “If the side agreements are submitted to prosecutors, we will prove them to be forgeries.”

In a television speech on the same day, Lee said, “If what they call ‘side agreements’ really existed, why would (Kim), after having served three and a half years in prison, speak about them at this stage, with the presidential election just a month away? If justice exists, the truth will be told.”

The prosecution, meanwhile, is trying to finalize an interim report on its investigation by this weekend, which is the deadline for candidate registration. Once a candidate registers, he or she is protected from arrest for previously committed crimes.


Please direct questions or comments to [englishhani@hani.co.kr]