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Prosecutor clears incoming S Korean president of fraud

A special prosecutor yesterday cleared South Korea's incoming president Lee Myung-bak of fraud allegations, bolstering his authority before he takes office next week.

The prosecutor, in a nationally televised announcement, said Lee was not linked to a 2001 stock manipulation scandal -- an allegation that had dogged his election campaign last year.

Lee could have taken office this Monday even if found to have been at fault and would have been immune from prosecution while in office. But the inquiry's findings removed a potentially serious embarrassment that could also have damaged his conservative party's chances in April's general election.

Some 45,000 guests have been invited to Monday's inauguration, including US Secretary of State Condoleezza Rice and Japanese Prime Minister Yasuo Fukuda.

"We found the president-elect was not involved in stock manipulation," prosecutor Chung Ho-young announced after a 40-day investigation by his team.

Lee welcomed the decision, saying it would help him focus on his pledges to revitalize the economy.

"It's a good thing that all suspicions about me were cleared away again and that the new government can have a fresh start," he said in a statement. "I will return my gratitude by serving the people with a sincere heart and dedicating myself to reviving the economy."

Lee, 66, had strongly denied any involvement in the scam, for which his former business partner Kim Gyeong-jun is on trial.

"We verified that Kim Gyeong-jun was independently involved in stock manipulation using a paper company," Chung said. "It was committed by him alone. There's no evidence that the president-elect was involved in embezzlement or share price manipulation."

The special prosecutor also cleared Lee of allegations that he had lied about his wealth and alleged ownership of real estate in an upmarket district of Seoul.

"Allegations that the president-elect owned the land by using borrowed names are groundless," Chung said.

Analysts said the findings enable Lee to garner greater public support in pushing ahead with his key reform pledges.

The liberal United Democratic Party, which had voted for the special probe, expressed disappointment and accused the special prosecutor of giving "an indulgence" to Lee.
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