Cheonggye Foundation Lee Myung Bak’s Asset Manager Detained by Prosecutors

Nicholas Kim, Feb. 13, 2018, 8:41 a.m.

Prosecutors said Tuesday they have detained an asset manager of former President Lee Myung-bak for destroying evidence that may link Lee to slush fund allegations. The Seoul Central District Prosecutors' Office took Lee Byung-mo, the executive secretary of Cheonggye Foundation, into custody on the charge of destruction of evidence. Lee is known to have long worked for the former president, mainly taking care of assets and property.

Lee is suspected of disposing of ledgers that apparently had detailed records of the ex-president's financial accounts, possibly created under borrowed names, and their transactions. Prosecutors have questioned Lee Byung-mo over how much he knows about the proceeds from the sale of a large land lot in southern Seoul by the former president's family.

Prosecutors have been investigating allegations surrounding DAS, an auto parts maker, of which the former president is suspected to be the real owner, while it on paper belongs to his elder brother. Lee Sang-eun, the largest shareholder of DAS, has told the prosecution that he bought his stake in DAS with the seed money he earned from the land sale. The prosecution believes it was the former president who acquired the DAS stake with the proceeds, only under his brother's name.

Investigating the course of the land sale is vital for the prosecution in not only determining the real ownership of DAS, but uncovering the ex-leader's 12 billion won (US$11 million) slush fund, which is alleged to have been kept hidden in the company.

The former president has categorically denied the allegations. Meanwhile, the prosecution sought an arrest warrant for Lee Young-bae, chief of a subcontractor of DAS, over the suspicion that he embezzled his company's funds to create a slush fund, which may be linked to the former president.

Lee, the brother of the former president's wife, has also been known to have managed his assets.

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