Former CEO Says Lee Myung-bak Is Innocent

The Seoul Central District Prosecutors’ Office recently convened and asked Hong Jong-guk (48), former E-capital CEO, to explain allegations that he sold 600,000 BBK shares which he had owned between September 1999 and February 2000 to Kim Gyeong-jun (41), who is the key figure in the BBK scandal and who is now in police custody.

His claim of presidential candidate Lee Myung-bak’s innocence is likely to affect the prosecutors’ announcement of investigation results concerning the BBK stock manipulation probe slated for next week, since his statement is in stark contrast to the Korean language contracts submitted to the prosecution by Kim Gyeong-jun on Nov. 23. Kim has been arguing that Grand National Party candidate Lee Myung-bak is the real owner of BBK on the grounds that the contract clearly shows that Lee agreed to sell 610,000 BBK shares to Kim for 4.999 billion won on February 21, 2000.

Hong, who left for Paris on Nov. 29, said in a telephone interview with Dong-A Daily, “I invested 3 billion won in September in 1999 and purchased 600,000 BBK stocks (99 percent of the available equity) in the name of E-capital. It is true that I had held the stocks until February 2002, though I resold to Kim by 300,000 shares.”

He explained that the 3 billion won he invested in the BBK was from Lee Deok-hun (62), the former chairman of E-capital. The former chairman submitted a detailed statement of his financial transactions as material evidence, saying, “The 3 billion won was not individual capital, but a business fund.”

In addition, Hong and Lee denied the implications that Lee is involved in the BBK scandal, saying, “We have never met with the GNP candidate in person, and did not hear his name when we invested in BBK.”

Prior to this, Hong attended the National Assembly`s hearings on the Financial Supervisory Service (FSS) as a witness on October 26 and clarified E-capital’s investment in BBK was not related to Lee Myung-bak.

A prosecution source said, “Given the prosecution allowed Hong, a key witness in the BBK scandal, to leave the country, it can be interpreted that the prosecution is leaning toward believing Hong.”

Senior Prosecutor Kim Hong-il of the Seoul Central District Prosecutors` Office said, “There has been no agreement reached yet concerning the timing, content, and method of the investigation results. We, however, still hold the same belief that the investigation should be carried out swiftly and thoroughly.”

Meanwhile, the law firm defending Kim Gyeong-jun in a lawsuit filed by DAS, a company owned by Lee Myung-bak’s elder brother and brother-in-law, held a press conference in Los Angeles on Nov. 29, and released documents containing Lee’s signatures, saying, “The contracts revealed on Nov. 20 by Kim’s wife that raised suspicions of Lee’s implication in the BBK scandal are all forged.”