Bloomberg News

S. Korean President’s Brother Arrested Over Banking Scandal

July 10, 2012

Lee Sang-deuk

Lee Sang-deuk, South Korea president Lee Myung-bak's elder brother, center, is escorted by investigation officers as he is transferred to a detention house from the prosecutor's office in Seoul, South Korea. Photrographer: Chung Sung-Jun/Getty Images

South Korean President Lee Myung Bak’s older brother was arrested and detained over a savings bank bribery scandal, prosecutors said today.

Lee Sang Deuk, 76, who served six terms in parliament, was taken into detention early this morning, said Choi Woon Sik, head of the team investigating wrongdoing at savings banks. Prosecutors can detain a suspect up to 20 days before making an indictment, Choi said.

The arrest is a blow to President Lee and his New Frontier Party as the campaign to elect his successor later this year intensifies. The NFP narrowly held power in an April 11 parliamentary election after a former speaker in the National Assembly and long-time mentor to President Lee resigned over alleged vote-buying.

The allegations against Lee’s brother relate to receiving illegal political donations, said Cho Won Kyoung, a judge and spokeswoman at the Seoul Central District Court.

The elder Lee, who wasn’t contactable to provide comment today, said on July 3 he would “faithfully participate” in questioning by prosecutors. He declined to comment further to reporters that day. President Lee’s office had no comment today on the arrest, spokeswoman Lee Mi Yon said by telephone.

Prosecutors have indicted nearly 200 people and ordered at least two jail sentences after uncovering illegal lending and lax oversight among bankers, regulators, politicians and lobbyists. The Financial Services Commission has closed 20 savings banks since January 2011 and more than 88,000 depositors and bond holders have lost more than 1 trillion won ($878 million).

Customers who lost money in the savings banks’ collapse hurled eggs at Lee as he was reporting to prosecutors for questioning yesterday. He wasn’t hit by any of the eggs.

To contact the reporters on this story: Seonjin Cha in Seoul at scha2@bloomberg.net; Sangwon Yoon in Seoul at syoon32@bloomberg.net

To contact the editor responsible for this story: John Brinsley at jbrinsley@bloomberg.net


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