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Prosecutors focus on authenticity of 'secret documents'

State prosecutors investigating a fraud case involving Lee Myung-bak's former business partner Kim Kyung-joon are focusing on the authenticity of documents which the suspect's family submitted last week to incriminate the leading presidential candidate.

Kim's family claims the documents prove the scandal-ridden investment fund, BBK, was entirely owned by the Grand National Party candidate. Lee has so far flatly denied any connections to the company operated by Kim.

The prosecutors are said to have secured the seal register of LK-eBank, a de facto holding company of BBK, eBank Securities, and other financial firms related to the 2001 scandal. The ledger contains official seals of Lee and Kim.

Kim's legal representative, Oh Jae-won, said yesterday that the investigators are comparing the two Lee seals - one on the corporate book and the other on the written agreement that Kim's mother handed in last Friday.

He said both appear identical.

The authenticity of the seal is the key to the investigation. If it proves to be real, it would nearly cement Kim's argument that Lee played a behind-the-scene role in stock rigging and embezzlement committed by Kim.

Kim was extradited on Nov. 16 from the United States and arrested on Nov. 18 in Korea. The arrest warrant allows the prosecution to detain Kim until Dec. 5, before which the interim result of the fraud probe is expected to be released.

Forgery experts at the National Institute of Scientific Investigation and the Supreme Prosecutors' Office are trying to verify the authenticity of the four documents which Kim's mother submitted.

One of them - written in the Korean language - indicates that Lee owned a stake in BBK. It states Lee sold 610,000 shares in the company to Kim, described as the CEO of LK-eBank, for 5 billion won ($5.4 million) on Feb. 21, 2000. The agreement bears the business seals of both Lee and Kim.

But Lee's aides raised suspicion that both the document and Lee's seal on it are fakes.

Oh, Kim's defense lawyer, told reporters, "It is believed that candidate Lee directly handed the seal to Kim with an agreement that Kim is allowed to use it as LK-eBank CEO's official seal. I think the GNP is mistaken when they said the seal on the Korean contract is different from Lee's official one."

The lawyer added that he didn't know how the prosecution obtained the company's seal ledger. Kim may have brought it from the United States, or it may have been part of the package of the documents from Kim's sister, Erica Kim, sent on Nov. 13 to Kim's former lawyer, Park Soo-jong.

The conservative party countered that the seal was not an officially registered one.

"In the process of establishing eBank Securities, Lee comprehensively entrusted Kim (with company operations). The one on the Korean contract appears to be a private seal (not for official use) that Kim made (without Lee knowing)," said Hong Joon-pyo, the head of GNP Clean Politics Commission.

The GNP added that what matters most is that the documents were forged.

"The seal is not the key issue here. What we should focus on is that the contract was counterfeited," said GNP spokesman Park Hyung-jun.

The liberal United New Democratic Party said what the GNP calls "a private seal" is the one which was actually used instead of the original seal registered with the government.

"It was a seal that was actually used. This seal (on the Korean contract) has an equal legal effect with the officially registered one," said UNDP spokeswoman Kim Hyun-mi.

"Calling it a mere private seal represents ignorance of corporate practice or it might be just a poor excuse. Considering (GNP) candidate Lee was formerly an businessman, I believe the latter is right," she added.

The authorities are investigating whether or not Lee handed the seal over to Kim as the GNP claimed; whether the seal on the ledger is the same as the one on the Korean contract Kim submitted; and when Kim's secret contract was written.

The authorities have questioned key witnesses, including Kim Sung-woo, head of DAS, an auto parts company, owned by Lee's brother and brother in law. The company invested 19 billion won in BBK. Lee is claimed to be the actual owner of DAS although it is registered under his relatives' names.

Prosecutors were expected to present their findings before the Nov. 25-26 candidate registration period for the Dec. 19 presidential election in a move to prevent the probe from influencing the campaign.

The suspect's sister Erica Kim previously told local media that Lee might have attracted most of the investment in BBK since his brother was too young to know many Korean investors. Lee has so far denied it.

Ascertaining the authenticity of the seals is a complicated and time-consuming process, according to Han Yong-tek, head of the Korean Forensic Document Agency.

"The process is likely to take over two weeks. It will take more than a week to examine the documents and another week to write up a report to present to both sides," Han told The Korea Herald.

At least 30 features, including the amount of ink used on the documents; how much pressure was applied to the paper to fix the seal; how the seal was carved; and a 25-fold magnification of the original documents to compare details will be examined in the verification process, Han added.


By Song Sang-ho


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2007.11.26