Ban Ki-moon’s nephew connected to Sung case

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Ban Ki-moon’s nephew connected to Sung case

United Nations Secretary General Ban Ki-moon’s reputation is at risk as his nephew is caught up in allegations of shady dealings over the attempted sale of a building built and owned by Keangnam Enterprises, once chaired by businessman Sung Wan-jong.

Sung hanged himself from a tree on a mountain in April over allegations of dirty dealings with the Korean government - but not before blowing the whistle on payments he made to the inner circle of President Park Geun-hye. That scandal is still unfolding.

In a new twist on the Sung saga, Ban’s nephew, Bahn Joo-hyun, managing director of a New York-based real estate firm, is suspected of stringing along Keangnam and its creditors when he took charge of selling Keangnam Landmark 72, the tallest building in Vietnam. He allegedly faked a letter from a potential buyer, the Qatar Investment Authority (QIA), Qatar’s sovereign wealth fund.

He gave Keangnam a letter in which the QIA said it was basically a done deal.

“We are awaiting our Chief Executive Officer’s approval and the Board of Directors of QIA has preliminarily agreed to allocate funds for this transaction,” the letter read. “QIA expects to execute and perform the proposed contracts by end of the month barring any unforeseen events.”

Keangnam Enterprises handed over the document to its creditors in March.

QIA denies the letter.

“It’s completely fake,” said an official of the QIA. “They even faked my signature, and we don’t even know Keangnam, the seller.”

Construction of the Landmark 72 was completed in 2011. The 72-story building is 330 meters (1,083 feet) tall and has 610,000 square meters (150.7 acres) of space. Keangnam Enterprises invested 1.2 trillion won ($1.1 billion) to construct the building.

In 2013, it decided to sell it to relieve its financial difficulties.

Ban Ki-sang, the younger brother of the UN secretary general, served as the company’s senior adviser for seven years, and he recommended the company give the exclusive right to sell the building to his son when the company decided to sell the building. When he reported that QIA was interested, Keangnam gave the son a 600 million won advance on condition he acquire QIA’s letter of intent to buy the building.

E-mails exchanged between QIA and Bahn Joo-hyun after JTBC released its report on Wednesday also supported the QIA’s claim, although Bahn’s reply was more ambiguous.

“As you can imagine, we are very surprised as this is clearly not true,” read an e-mail from QIA to Bahn. “As in our earlier email exchanges, we have rejected this deal & not continued discussion since.”

Bahn replied:

“Yes this is something that has occurred unfortunately with over-zealous press as well as Korean creditors (which we suspect is the culprit of leaking the false story) trying to play ‘games’ to increase the disposition price,” his reply read. “I apologize for this but we were surprised as much as you and also put a hold on other negotiation we were having with other potential investors. Going forward there will not be any misleading press coming out from Korea regarding this deal and QIA’s involvement.”

Bahn refused to answer questions from JTBC, saying the deal was still being negotiated.

Ban Ki-moon may be embarrassed because his nephew dropped his name frequently during negotiations with Keangnam Enterprises.

When the construction company complained about the sale being delayed, Bahn claimed on phone calls or in e-mails that the UN Secretary General commented on Landmark 72 in a meeting with the emir of Qatar. He even specified the date and venue of the meeting.

Bahn is believed to have dropped the name of the secretary general when he talked to QIA as well. “What we knew about [Bahn Joo-hyun] is that he is related to the UN secretary general,” another official of the QIA said.

Secretary General Ban is also suspected of connecting his brother with Keangnam Enterprises because he is a founding member of the Chungcheong Forum, a forum for political figures from the Chungcheong provinces, which was created by Sung.

Sung held a press conference on April 8, the day before he hanged himself on Mount Bukhan in central Seoul to protest a government investigation of his company for corruption.

“QIA was scheduled to buy the building,” Sung said at the press conference. “The amount of the deal is big so it’s going to solve [our financial problems].”

The company was struggling with 530 billion won in debt for the construction of the building in Vietnam, and had decided to be delisted and go under debt receivership in March.

BY KIM BONG-MOON, JUNG JAE-YOON [kim.bongmoon@joongang.co.kr]

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