Prosecutors Entangled, Politicians Bitten... Political, Financial Circles and 'Prosecution' Stirred by Lime and Optimus (Comprehensive)

President Moon Jae-in and Minister Choo Mi-ae Order "Thorough Investigation"... Prosecutors' Investigation Team's Speed and Direction in Focus

[Image source=Yonhap News]

[Asia Economy Reporter Baek Kyunghwan] The Lime and Optimus private equity fund scandals have turned the prosecution, as well as the political and financial circles, upside down. President Moon Jae-in directly ordered a thorough investigation into the public institutions that invested in Optimus, and Justice Minister Choo Mi-ae, upon hearing allegations that some prosecutors were involved in the Lime scandal, described it as "shocking." This is expected to significantly influence not only the speed but also the direction of the prosecution's investigation.

◆ Choo's "Shocking" Reaction to Prison Letter = Kim Bong-hyun, former chairman of Star Mobility and the main suspect in the Lime scandal, claimed in a prison letter on the 16th that he entertained three active prosecutors with alcohol, one of whom later became a prosecutor in charge of the Lime case.

In a statement released through his lawyer that day, Kim said, "In July last year, through former official lawyer A, I entertained three active prosecutors with alcohol worth about 10 million won," adding, "At the time of the gathering, I was introduced to them as prosecutors who would later join the Lime investigation team, and indeed one of them joined the investigation team."

He also added, "The former official lawyer A said, 'The talks with the person responsible for the Lime case at the Seoul Southern District Prosecutors' Office are over. If you catch ruling party politicians and Blue House Senior Secretary Kang Ki-jung (Political Affairs), I will report to Prosecutor General Yoon Seok-yeol and you will be allowed to stand trial on bail.'" Kim claimed that he also lobbied opposition politicians and disclosed this to the prosecution, but the investigation did not proceed properly.

Minister Choo ordered an internal investigation immediately after Kim's prison revelations. She described the allegations of prosecutors' involvement in the Lime scandal as "shocking" and said, "Since social attention is focused on the related allegations and this is a serious matter, thoroughly clarify the truth." The investigation targets reportedly include allegations of entertaining and bribery involving active prosecutors through former official lawyers, and attempts to conceal lobbying to the prosecution.

Kim's mention of former Justice Minister Cho Kuk and Minister Choo Mi-ae in his prison letter also drew attention. He said, "At first, I was angry seeing former Justice Minister Cho Kuk deny everything," and added, "Having personally experienced the media's indiscriminate and rumor-based witch hunt and the prosecution's piecing together of evidence like a puzzle, I realized that prosecutorial reform in South Korea must be achieved." He continued, "Watching Minister Choo Mi-ae's handling of the situation felt like watching my own case," and "So I decided to reveal all the facts."

◆ Even President Moon Orders "Active Cooperation" and "Thorough Investigation" = The Blue House, which had kept its distance from the pouring allegations, has also changed its stance. President Moon Jae-in ordered a thorough investigation into the circumstances of public institutions' investments in the Optimus fund. This additional statement came two days after he instructed active cooperation with the prosecution's investigation into the 'Lime and Optimus allegations.'

Blue House spokesperson Kang Min-seok said, "Reports are emerging about public institutions such as the Korea Radio Promotion Association investing in the Optimus fund," and added, "President Moon instructed that, separate from the prosecution's investigation, the relevant government departments thoroughly examine the circumstances of these public institutions' investments." The Blue House explained that the government departments were ordered to rigorously scrutinize whether the investment decision process was appropriate, regardless of whether the public institutions suffered losses.

Previously, on the 14th, President Moon had instructed regarding the Lime and Optimus cases, "Nothing can be a sanctuary from the prosecution's strict investigation. To quickly resolve the suspicions, the Blue House must actively cooperate with the prosecution's investigation."

Public institutions that invested in the Optimus fund include not only the Radio Promotion Association but also the Korea Rural Community Corporation, Korea Racing Authority, and Korea Electric Power Corporation. At that time, spokesperson Kang explained, "Regardless of whether there were losses, it is necessary to examine whether the investment decision was appropriate and if there were any shortcomings."

Besides public institutions, government ruling party figures who invested in Optimus have also been mentioned. Minister of the Interior and Safety Jin Young invested a total of 500 million won in the Optimus fund in February under his own name, his spouse's, and his son's. He invested 100 million won under his own name, and both his spouse and eldest son invested 200 million won each. Additionally, a member of the National Assembly's Planning and Finance Committee from the Democratic Party reportedly invested 100 million won last year and later redeemed it.

◆ Will the Prosecution Speed Up the Investigation? = The issue now is the speed and direction of the prosecution's investigation. With the president personally involved, both the Seoul Southern District Prosecutors' Office handling the Lime case and the Seoul Central District Prosecutors' Office handling the Optimus case must hurry to take the next steps.

In the Optimus case alone, the investigation team conducted raids on 18 locations including Optimus headquarters, affiliated companies, and NH Investment & Securities, the fund distributor, but had not yet investigated the lobbying allegations. The day before, the Seoul Central District Prosecutors' Office requested arrest warrants for the chairman brothers of the cosmetics company Skin & Skin, who are suspected of participating in a Ponzi scheme involving the Optimus fund investment.

However, the prosecution recently doubled the size of the Optimus investigation team, which was originally composed of nine members, centered on the Economic Crime Division of the Seoul Central District Prosecutors' Office (Chief Prosecutor Joo Min-cheol). After receiving five prosecutors on temporary assignment from the Ministry of Justice, they added four more from within the Seoul Central District Prosecutors' Office?one each from the Fair Trade Investigation Division, the Violent Crime Division, the Criminal Division, and the Trial Division?expanding the team to a total of 18 prosecutors. If the investigation team confirms the lobbying activities of Optimus to some extent, the investigation into political lobbying allegations raised through internal documents is also expected to gain momentum.