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Prosecutors will apparently seek an arrest warrant for former Korea Exchange Bank president Lee Kang-won on charges of breach of trust for his role in the 2003 sale of KEB to Lone Star at a knockdown price. They summoned Lee and took down a statement from him last week, sources said. Board of Audit and Inspection investigations revealed that Lee played a leading role in inflating KEB's debt and selling the bank at far below market price to the offshore fund.
Prosecutors are also mulling arrest warrants for former KEB executives and former officials in charge of financial supervision at the time of KEB's sale to Lone Star for alleged malfeasance in the sale.
They summoned officials including the former director-general of the Finance Ministry¡¯s Financial Policy Bureau Byeon Yang-ho and others at the Financial Supervisory Commission and the Financial Supervisory Service on Wednesday for more questioning. Prosecutors plan to indict them at the end of November after wrapping up their probe.
Prosecutors will also want a word with former finance minister Lee Hun-jae, who is suspected of influencing the deal when he was chief advisor for Kim & Chang, the law firm that gave legal advice to Lone Star at the time of the sale. But the prosecution said there was ¡°no particular charge against Lee.¡±
Meanwhile, the Texas-based U.S. fund¡¯s chairman John Grayken on Tuesday denied the firm manipulated KEB share prices, saying the charge was ¡°totally false, and is not supported by any hard facts.¡± In a statement, Grayken said, "It is especially disappointing that the Supreme Prosecutors Office has gone forward in this manner without any real attempt to obtain the testimony of the various members of KEB's Board of Directors. We will vigorously defend our company and our officers from these baseless accusations.¡± Senior Prosecutor Chae Dong-wook said "Prosecutors conduct investigations not based on any intentions but based on evidence, and we do so according to fair and legal procedures. We were cautious in applying for arrest warrants and will take legal action against people where the charges were confirmed.¡±
On Tuesday, prosecutors applied for three KEB outside directors including the vice chairman of Lone Star Ellis Short for colluding to manipulate stock prices of KEB's credit card business unit plus Yoo Hoe-won, the head of Lone Star Advisors Korea which oversees Lone Star's Korean investments. The Seoul District Court decides whether to issue arrest warrants for the four on Thursday.
(englishnews@chosun.com )
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