Kang Gi-jung, a former presidential senior secretary for political affairs, filed a criminal defamation complaint Monday against an entrepreneur who accused him of accepting bribes to help a scandal-ridden hedge fund avoid an audit by the financial authorities.

Kang asserted that Kim Bong-hyun, former chairman of Star Mobility and a prime suspect in a financial fiasco involving Lime Asset Management, gave false testimony in court and misrepresented the financial disaster as a case of government-related fraud.

On Oct. 8, Kim took the witness stand in the trial of Lee Kang-se, a former Star Mobility CEO hired to lobby the government, who is being tried on charges of bribery and embezzlement. Kim testified that he had paid 50 million won ($43,500) to Kang through Lee.

“Kim’s false testimony interfered with the judicial function and severely injured the accuser’s honor,” Kang said in a statement.

“Although the basis of the incident was a major financial fiasco that stemmed from his hideous greed, he tried to skew the matter into a political corruption case in order to get lighter punishment,” he added.

The Lime scandal started in July last year when the Financial Supervisory Service began looking into allegations that the hedge fund had deceived investors and covered up massive losses.

Questioning the reliability of the prosecutors’ offices in charge of the Lime case, the main opposition party called for an independent team of special prosecutors to get to the bottom of the case buoyed by Kim’s testimony.

Kim Chong-in, a leader of the main conservative opposition People Power Party, alleged that government and ruling party officials involved in the financial fiasco caused damages amounting to an estimated 2.1 trillion won.
“I cannot help suspecting that the financial incident involving Lime Asset Management and Optimus Asset Management is a power-related corruption case,” Kim said during a meeting with party officials.

Kim called on President Moon Jae-in to direct Prosecutor General Yoon Seok-youl to invoke his authority to command the prosecution to investigate the issue.

The party’s Floor Leader Joo Ho-young urged the launch of an independent special prosecutorial team to uncover the facts, citing the possible involvement of other political figures in the liberal bloc, including Democratic Party Chairman Lee Nak-yon and Gyeonggi Province Gov. Lee Jae-myung.

The ruling party chief called on prosecutors to conduct a thorough investigation, while warning of stern action in the event of false accusations and speculation.

Democratic Party spokesperson Choi In-ho criticized the opposition party for “indiscreet political attacks” that only amplified speculation. 


By Park Han-na (hnpark@heraldcorp.com)