The prosecution said Friday it has formed a special team to investigate slush fund allegations involving former President Lee Myung-bak.
The team in the Supreme Prosecutors' Office will look into the suspicions that DAS, an auto parts maker whose majority stake is owned by Lee's elder brother, has run a 12 billion won (US$11 million) secret fund under dozens of borrowed names, embezzled company money and evaded taxes. Lee is alleged to be the real owner of the company.
A civic group and a lawyers' association filed a complaint on Dec. 7 against the unknown real owner and an independent counsel who investigated the case in 2008 and cleared Lee of the allegations. Lee served as president from 2008-2013.
They accused Lee of embezzlement, concealment of criminal proceeds, tax evasion and dereliction of duty.
Prosecutors said the investigation will run separately from an ongoing probe into Lee's alleged involvement in DAS' suspicious recouping of its 14 billion won investment in an investment advisory firm set up by Lee's one-time business partner.
DAS was one of the biggest investors in Optional Ventures founded by Korean-American businessman Kim Kyoung-joon. Kim was accused of rigging the stock price of a subsidiary of his former company BBK, pocketed millions of dollars in ill-gotten profits and misappropriated hundreds of billions of won in company money in the early 2000s.
Ahead of the 2007 presidential election, Lee had been dogged by allegations that he was the real owner of BBK and DAS, and therefore responsible for share price rigging. He was cleared of the charges later.
But suspicions have been rekindled recently following revelations that Lee's son was named to head several DAS factories based in China, even though he has no share in the company.