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Allegations against S Korean president-elect to be dropped

Special prosecutors were expected to clear South Korea's president-elect Lee Myung-bak of allegations that he was involved in a stock manipulation scandal in 2001, media reports said yesterday.

Lee, who will take office next Monday, was questioned for three hours late on Sunday by three investigators, special prosecutor Kim Han-geun told reporters.

"Our interview focused on allegations that came out after [state] prosecutors completed their investigation," he said.

The state prosecutors in early December had cleared Lee of involvement in the fraud.

But parliamentary opponents of Lee, citing what they said was new video evidence, voted two days before the Dec. 19 presidential election to set up an independent probe.

Lee, 66, won a landslide victory despite the allegations -- which he denies.

"I responded to the inquiry, based on my belief that the law should be strictly observed," he was quoted as saying by Lee Dong-kwan, spokesman for his transition team.

Kim said Lee was questioned about his possible involvement in the 2001 case and any connections he had to an investment firm called BBK, which was linked to the fraud.

He gave no further details. But Yonhap news agency quoted sources as saying the special prosecutor is wrapping up the probe because the interview yielded little evidence.

The Chosun Ilbo newspaper also said prosecutors have failed to obtain decisive evidence that could reverse the results of the previous investigation.

The special probe was therefore likely to clear Lee of the charges when results are announced this week, it said.

Lee, a former CEO who will be the country's first president with a business background, has denied any role in the fraud allegedly engineered by his former business partner Kim Gyeong-jun.

He said he himself lost money.

Kim, who was extradited from the US, is on trial for stock manipulation, embezzlement of 38 billion won (US$42 million) and forgery.

Newspapers said Lee was quizzed about remarks he made in a 2000 video clip in which he appears to claim to have created BBK.

The investigators reportedly decided that Lee had been exaggerating his role to promote his business credentials.

The independent counsel is also investigating whether Lee lied about his wealth and alleged ownership of real estate in an upmarket district of Seoul. Sources said Lee was asked about the true ownership of the land.

"With a clean conscience and respect for the law, president-elect Lee accepted the questions squarely," his personal spokesman Joo Ho-young told during a press conference.

"We hope the special prosecutor will now make a fair decision according to the law."

Any adverse finding by the probe would not stop Lee taking office, but could damage his conservative party's prospects in the April general election.

As president, he would be immune from prosecution except for treason.
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