Prosecutors probe former BBK owner on libel case

Prosecutors opened an investigation into a libel complaint filed by a Korean-American businessman who is now serving a prison term for falsely raising embezzlement allegations against President Lee Myung-bak and misappropriating corporate funds.

The Seoul Central District Prosecutors’ Office yesterday said prosecutors questioned Kim Kyung-jun, currently imprisoned in Cheonan, 92 kilometers (57 miles) south of Seoul, last week over the complaint.

The investigation came after Kim, a former owner of investment firm BBK and a former business partner with Lee, filed the complaint against two men in December, claiming their widely-published allegations against him constitute defamation.

A controversial letter allegedly sent in 2007 by one of the two brothers, surnamed Shin, suggested Kim was brought to Korea from the United States under orders from the presidential office of the previous liberal-minded administration and the then ruling party. This was allegedly to spark embezzlement and stock price manipulation allegations against Lee, then the leading presidential candidate from the conservative bloc.

The elder Shin reportedly befriended Kim at a prison in Los Angeles.

Kim was extradited to Korea a few days before the presidential election in December 2007, which led the then opposition Grand National Party (GNP) to raise suspicions that the presidential office and the then ruling party were behind Kim’s disclosure of the so-called BBK scandal linked to Lee. The letter by the Shin brothers was used as the key evidence behind the GNP’s claims.

As the 2007 presidential election neared, Kim alleged that Lee manipulated the stock prices of Optional Ventures, formerly BBK, which he said Lee jointly owned with him, and embezzled a massive amount of funds from it. Despite the significant allegations, Lee was elected president in 2007 and prosecutors cleared him of the allegations the following year.

Kim, however, was sentenced to an eight-year prison term and fined 10 billion won ($8.7 million) for raising false allegations against Lee and embezzling 31.9 billion won in funds from the investment firm, later renamed Optional Ventures, which Kim alleged he owned jointly with Lee in the early 2000’s.

Kim’s conviction was followed by a series of counter-allegations that the letter, first known to be authored by the imprisoned elder Shin, was fabricated.

Yonhap