A James Bond-style gadget played a key role in cueing investigators into irregularities in the stock price manipulation of Korea Exchange Bank Credit Card Services. Prosecutors say a Nov. 20, 2003 meeting of the KEB board got underway at the Lotte Hotel in Sogongdong, Seoul to discuss incorporation plans for the card services division. It was attended by KEB outside directors from the offshore investment firm Lone Star that had recently taken over the bank -- its vice chairman Ellis Short, head of Lone Star Korea Steven Lee, Yoo Hoe-won, the head of Lone Star Advisors Korea, and legal advisor Michael Thompson.

The meeting was conducted in English, and recording was banned to ensure nothing that was discussed left the room. But a KEB staffer tasked with keeping the minutes placed a voice-recorder pen behind a flowerpot and recorded the entire meeting unbeknownst to the Lone Star execs because he did not trust his linguistic skill. “As the meeting was being carried out in English, there was really no other option but to record it so that I could accurately document what happened.”

After seizing the voice pen, prosecutors were able to listen to the whole meeting. With this evidence, prosecutors say it is clear Lone Star executives attempted to finagle the stock price with false rumors of a capital reduction. Thanks to the discovery, prosecutors sought arrest warrants on charges of stock price manipulation for the executives three years after the incident took place.

“In a case of stock price manipulation such as this where a major shareholder is involved, it is nearly impossible to prove the charges, but an ‘honorable person (‘guiin’ in Korean)’ made it possible,” a prosecutor quipped. “The honorable person we mentioned in briefings was in fact the voice-recorder pen.” Prosecutors deny the tape constitutes illegal wiretapping because a person involved in the meeting taped it.

(englishnews@chosun.com )