Defense nominee found to own KMDC stakes

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Defense nominee found to own KMDC stakes

Despite his consistent denials of having made stock investments, Kim Byung-kwan, the embattled defense minister-nominee of the Park Geun-hye administration, owns stakes in an overseas resources developer suspected of receiving special treatment during the previous administration, a local newspaper reported yesterday.

The Munhwa Ilbo reported that Kim, a 64-year-old former general, has owned stake in the Korea Myanmar Development Company, also known as KMDC, since 2011.

During the Lee Myung-bak administration, the company, despite its short history, won major offshore exploration contracts in Myanmar and speculations were high about the government’s preferential backing.

The report was based on the KMDC’s shareholder roster created for the National Tax Service. Kim was listed as a stakeholder of the company from January to December 2011.

During the National Assembly’s confirmation hearing, Kim flatly denied having invested in any stocks.

“I haven’t made any stock transactions and I do not own stocks,” he wrote in a statement submitted to the legislature.

Kim explained yesterday that he had purchased 750 unlisted shares of the firm at the price of 30 million won ($26,986) in May 2011 and made an additional investment of 4.5 million won later that year. “But I had forgotten about it because the stock price plummeted and it had almost no value,” he said.

Kim also said he accidently omitted the information because he had too many things to prepare for the confirmation hearing.

When KMDC was first established in May 2010, it was a small enterprise which issued 10,000 shares at a face value of 5,000 won each. It, however, grew rapidly and had 330,000 outstanding shares as of August 2010 with the total capital amounting to 1.65 billion won.

And less than a year from its establishment, the firm also won offshore exploration and development rights in Myanmar, fueling speculation that it was enjoying special favors from the government.

Representative Yun Kwan-seok of the DUP pressured Park to make a bold decision and retract the nomination.

“If the president goes ahead and appoints him, the DUP will take legal action against Kim,” he said.

Another DUP spokesman also urged Kim to bow out.

“He was already criticized for dozens of scandals, such as working as a lobbyist for an arms dealer, going on a golf trip after the Cheonan’s sinking and evading inheritance tax,” Representative Jung Sung-ho, spokesman of the DUP said.

“Now it has been revealed that he lied under oath. He is like a department store of corruption.”

By Ser Myo-ja []
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