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(LEAD) Justice ministry, prosecution collide in fund scandal probe

16:58 October 18, 2020

(ATTN: RECASTS headline, lead and para 2; ADDS more details in paras 6-7)

SEOUL, Oct. 18 (Yonhap) -- The Ministry of Justice said Sunday that the prosecution failed to thoroughly investigate a high-profile fund scandal that involves alleged bribery of a slew of politicians and government officials, but the prosecution hit back, saying that the ministry's claims are groundless.

The ministry said the prosecution did not sufficiently look into the claims by Kim Bong-hyun, a key suspect in the financial fraud case involving Lime Asset Management Co., that he lobbied former and incumbent prosecutors, as well as government officials, in connection with the case.

Kim was arrested in April on charges of embezzlement. Lime Asset, founded in 2012, has been under probe over its alleged cover-up of massive losses and subsequent suspension of fund redemption worth an estimated 1.6 trillion won (US$1.39 billion)

The photo shows a letter written by Kim Bong-hyun and revealed by his lawyer on Oct. 16, 2020, in which Kim claimed that he had lobbied politicians and sitting prosecutors in connection with Lime Asset Management. (PHOTO NOT FOR SALE) (Yonhap)

The ministry made the conclusion after a three-day independent probe into Kim and his claims. It also said that prosecutors did not actively handle the case, despite Kim's testimony at the prosecution about his lobbying and Prosecutor General Yoon Seok-youl's order for swift investigation.

The ministry said it will form a separate team to look into the case, but did not elaborate on details.

But the prosecution claimed that the ministry's probe results are not based on facts.

"Prosecutor-General Yoon has ordered a thorough investigation into the case several times and probes into politicians are also underway," the prosecution said.

Kim argued in a letter revealed by his lawyer on Friday that he spent 10 million won to throw a drinking party for three incumbent prosecutors in July last year, and one of them took part in the investigation into the Lime scandal.

Earlier this month, he also argued that he gave 50 million won in bribe to former senior presidential secretary for political affairs Kang Gi-jung through a third person last year. Kang denied all allegations and filed a lawsuit against Kim on defamation and perjury charges.

Later in the day, the Supreme Prosecutors Office released a statement to strongly rebut the ministry's earlier announcement, and said the investigation into the Lime scandal was well underway.

Kim Bong-hyun, owner of Star Mobility, is taken out of a detention room at Nambu Police Station in Suwon, south of Seoul, on April 24, 2020, to undergo a probe into his alleged involvement in Lime Asset Management Co.'s cover-up of massive losses and subsequent suspension of fund redemption worth an estimated 1.6 trillion won (US$1.3 billion). (Yonhap)(END)

jaeyeon.woo@yna.co.kr
(END)

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