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Probe of S. Korea candidate ordered resumed

South Korea's president ordered justice officials Sunday to reopen an investigation into financial fraud allegations against the presidential front-runner, a move that may affect this week's vote.
Image: Members of main opposition Grand National Party and pro-government United New Democratic Party fight in Seoul
Members of the main opposition Grand National Party and the pro-government United New Democratic Party fight at the compound of the National Assembly in Seoul, South Korea, on Monday. Yonhap / Reuters
/ Source: The Associated Press

South Korea's president ordered justice officials Sunday to reopen an investigation into financial fraud allegations against the presidential front-runner, a move that may affect this week's vote.

President Roh Moo-hyun asked the justice minister to consider reopening the case against conservative candidate Lee Myung-bak to "relieve the public suspicion and regain the prosecution's trust," Roh's office said on its Web site. The request effectively orders the minister to do so.

Justice Minister Chung Soung-jin held a meeting with officials but had not yet decided whether the ministry would reopen the case itself or an independent counsel would launch its own probe, said a ministry official who asked not to be named, citing policy.

The ministry plans to make a decision on Monday, he said.

Lee, a former Hyundai executive and Seoul mayor running as the Grand National Party's candidate, has been heavily favored to win Wednesday's election with more than double the support of his nearest rival in opinion polls.

Earlier this month, prosecutors said Lee had been cleared of wrongdoing in a stock price manipulation case surrounding a former business associate.

Lee's liberal rivals have said money used for the stock manipulations came from the BBK investment firm, and that Lee was its real owner, meaning he was involved in the crime. Lee has categorically denied the allegations, saying they are a plot to discredit him.

Fisticuffs exchanged in parliament
Rival lawmakers came to blows in parliament last week as Lee's party tried to stop pro-government United New Democratic Party lawmakers from submitting a bill to reopen the probe. The legislature was likely to vote on the bills Monday.

Scuffles broke out again in the National Assembly on Sunday night when hundreds of GNP members tried to enter the main floor of parliament, which was occupied by pro-government United New Democratic Party lawmakers.

President Roh's move came hours after the United New Democratic Party made public a video in a last-ditch effort to affect the vote, where Lee was filmed saying that in 2000 he set up the BBK investment firm that has been at the center of the allegations.

"I founded an investment firm called BBK in January," Lee said in October 2000 video of a lecture at a Seoul university.

Seoul police were questioning three men suspected of trying to extort the Grand National Party for the video, a police official confirmed on condition of anonymity due to the ongoing investigation. The Hankook Ilbo newspaper reported in its Monday edition they had been accused of seeking $3.2 million.

Just after the video was released, Yonhap news agency had reported that prosecutors did not plan any renewed investigation as they said the tape did not reveal any new information.

Roh's order for prosecutors to go ahead with the probe shows "the president is intervening in the presidential election and undermining the independence of the prosecution," Grand National Party spokeswoman Na Kyung-won said.

During the presidential candidates' final debate Sunday evening, Lee also called on the president to remain neutral during the election campaign, saying the video was political manipulation to affect the vote.

But in an about-face from the party's stance, Lee said Sunday night he would accept an independent counsel probe into the financial scandal, according to his office.

Rival urges Lee to withdraw candidacy
Lee's former business associate, Korean-American fund manager Kim Kyung-jun, was extradited earlier this year to South Korea from the United States. Kim fled to the U.S. in 2001 with the alleged ill-gotten gains, but was arrested there in 2004.

Prosecutors have indicted Kim on charges of stock manipulation, embezzlement and forgery.

Lee' s rivals said the video proved he wasn't truthful about his involvement in the investment firm linked to the stock manipulations.

Lee "should offer an apology and withdraw the candidacy," Lee Hoi-chang, who is running as an independent, said during the live televised debate.

Lee Hoi-chang is third in the most recent media polls, while Chung Dong-young of the United New Democratic Party is in second.