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South Korea's President's son to face tax probe

world Updated: Nov 14, 2012 13:05 IST

AFP
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South Korean prosecutors said on Wednesday they would refer President Lee Myung-Bak's only son to the tax authorities as they handed down indictments over a project to build Lee's retirement home.

Although Lee Si-Hyung was not among the three people indicted, prosecutors said his tax records would be checked by officials for possible imposition of gift tax on funds he received from family members to help purchase land for the home.

"We've decided to pass on documents to the National Tax Service," special prosecutor Lee Kwang-Bum told reporters.

Those indicted on various charges relating to breach of trust included the former head of the Presidential Security Service, Kim In-Jong.

The indictments followed a one-month investigation by special prosecutors into alleged irregularities in the purchase of a plot of land on the southern edge of Seoul.

The land was to be used to build a retirement home for Lee, who will formally leave office in January having served the single presidential term allowed under the South Korean constitution.

The lot was jointly purchased by the president's son, Lee Si-Hyung, and the presidential security service which would have needed to house its agents on the site.

But the cost was allegedly not split evenly, with suggestions that the security service paid too high a price for its share, while Lee's son got a below-market rate for the residential plot.

In the course of their probe, the prosecutors grilled the president's brother, Lee Sang-Eun, who had given his nephew 600 million won ($542,000) to secure the land deal.

First Lady Kim Yoon-Ok was also questioned -- although only in writing -- over a similar-sized loan she made to her son.

The presidential Blue House has denied opposition claims of financial chicanery.

But in the face of mounting criticism, the president scrapped the whole project and decided to move into his existing private house in southern Seoul after leaving office.