President’s son, 3rd year office worker, bought a 5B KRW (4.4M USD) house

Disclaimer: The following is a totally unauthoritative personal translation of a news article appeared in <SisaIN>, a weekly truly impartial investigative news journal (a rare thing in Korean news media environment), on October 11, 2011 regarding the land President Lee’s son Si-hyung Lee purchased in May about 5 months ago. Since this report, suspicions regarding the land, the transaction, and other related matters have surfaced in Korean media and have become a critical political issue that actually blew the Seoul mayoral by-election on October 26. Suspicions regarding the whole issue are so diverse. (1) What was President Lee’s intention? Did he actually try to live in that place but put his son’s name on it instead temporarily, which is illegal in Korea, in order to make a better deal as explained by the Executive Office of President (EOP) or did he try to give that land to his son utilizing tax payer’s money, which is also illegal? (Interestingly, Mr. Si-hyung who paid only about 1/4 of total purchasing price has ownership over 3/5 of the most expensive lot of that property.) (2) Did President Lee not know the whole transaction beforehand or its possible illegality as explained by EOP? (Interestingly, there have been reports that President Lee himself actually visited that place quietly before making the purchasing deal. However, residents of that area, recognizing First Couple themselves, greeted them, some even shook hands with President, creating a small commotion in the neighborhood.) Then, what about the First Lady whose share of private residence in Nonhyun-dong, Gangnam-gu, Seoul was actually used in getting bank loans Mr. Si-hyung Lee used in purchasing the problematic land? (Interestingly, the ownership of President Lee’s private residence is split into President Lee’s share of building itself and First Lady’s share of front yard excluding building, something unheard of so far and probably in the future.) (3) Even if we believe EOP’s explanation, then why Naegok-dong? Was he motivated by the huge profits he would be by the development plan Seocho-gu set up recently? Or was he actually motivated to build a so-called ‘MB town’, an exclusive private residence for his family, around that area as rumors in that neighborhood have circulated recently? (Interestingly, President Lee’s older brother Sang-deuk Lee and ex-mayor of Seoul Se-hoon Oh also have their lands in that area. Also interestingly, another area EOP looked into as possible site of private residence after presidency is also known to be an area whose projected possibility of near future development (and corresponding profitability) is also high. As is well-known by now, President Lee was CEO of one of the biggest development companies in Korea, Hyundai Engineering & Construction Co, Inc, for a long time.) (4) Who was the real owner of that property? The original owner of that property ‘Sooyang’ is known to be Mrs. Yoo who ran the Korean restaurant ‘Sooyang’ herself but left to US after the selloff. Interestingly, the whole estate Mr. Si-hyung Lee bought is reported to be composed of the original site of restaurant ‘Sooyang’ and attached lots endowed with to Mrs. Yoo by Mr. Park, a team leader of Seoul Development Institute, the think tank of Seoul city where many of President Lee’s aids have close ties with. Also, Mrs. Yoo was known to be highly enthusiastic about running ‘Sooyang’, a  Hi-Seoul Recommended Korean Restaurant accolade recipient. So the background why she suddenly decided to fold the lucrative business and sell it to Mr. Si-hyung Lee is also questionable. (For this, please be advised to read this article.) All rights regarding this post stay with the author of the original report and with <SisaIN>. This post will be scrapped by their request immediately. The original article (in Korean) can be located following the link at the bottom.

Mr. Si-hyung Lee, son of the President Myung-bak Lee, bought a grandiose residence built on 1,600 square meters (0.4 acre) area in Gangnam (the most expensive area in Seoul, Korea). Where did Mr. Lee who had reported only 36,562,000KRW (1,147 USD) for his total assets get all that money from? How come does EOP share the ownership of this residence?

Editor’s note. <SisaIN> discovered that Mr. Si-hyung Lee, son of the President Myung-bak Lee, bought a grandiose residence built on 1,600 square meters (0.4 acre) area in Naegok-dong, Seocho-gu, Seoul. We also discovered that EOP bought the same land with Si-hyung Lee. There has been no other case where the Office of the Presidential Security bought a land with President’s son or daughter before. Questions also arise how Mr. Lee who has worked for just 3 years as an office worker came up with the huge money. For details, please refer to no 213 , currently on sale.

On last May 13, Mr. Si-hyung Lee (33), son of the President Myung-bak Lee, bought a Korean restaurant house ‘Sooyang’ in Naegok-dong, Seocho-gu, Seoul. It is a grandiose residence sitting on a land of 1,600 square meters (0.4 acre). It has been assumed that the building itself would be over 330 square meters (3,552 square feet) but it is just what neighbors guess. The building was unlisted from the real estates building registry and could not be confirmed.

The land Mr. Lee bought is made up of 3 lots. The lot 20-17 (528 square meters; 5,683 square feet) where the building ‘Sooyang’ stood is city area level 1 exclusive residential area. Lots next to it, 20-36 (259 square meters; 2,788 square feet) and 30-8 (826 square meters; 8,891 square feet) are in greenbelt; any modification within greenbelt area is strictly regulated.


(Photo by Nam-jin Cho, SisaIN)

Very strange thing is that EOP bought the same land with Si-hyung Lee. According to a certified copy of real estate registry for the lot 20-17 (528 square meters; 5,683 square feet), Mr. Si-hyung shared 330 / 528 and EOP shared 198 / 528 of the land ownership. According to registry, the lot next to it, 20-36 (259 square meters; 2,788 square feet) is also shared by Mr. Si-hyung with a share of 97 / 259 (declared deal price of 80,250,000 KRW or 70,000 USD) and by EOP with 162 / 259 share. On May 25, EOP bought lot 30-8 (826 square meters; 8,891 square feet). Mr. Si-hyung does not have any ownership about this lot. All three lots were previously owned by one person Mrs. Yoo before the transaction.

It is known that there has not been any other instance where the Blue House or the Office of the Presidential Security (OPS) bought land or house with President’s offspring. One Blue House high ranking official during previous participatory government said “It does not have any legal basis or comparable previous example or practice that the Blue House buys a house with President’s offspring. It is really an unusual thing.” One official of OPS said “OPS is supposed to build a security building near the President’s private residence. We are supposed to guard incumbent president’s direct lineal ascendant and descendant. But OPS does not get involved in buying or building a house of president’s offspring.”

The land purchase price listed in the real estate registry is 5,017,750,000 KRW (4.4M USD). Questions also arise about the money used for buying the house and land. President Lee and his wife donated almost all their properties but for some hotel memberships to Cheonggye Foundation. Mr. Si-hyung does not have any decent assets. President Myung-bak Lee was elected to National Assembly in 1993 as a member of Democratic Liberal Party and reported his assets as a public official for the first time. Mr. Si-hyung appeared for the first time on the February 27, 1995 report. He reported to spend 23,809,000 KRW (20,761 USD) for stakes and insurance fees. In remarks column, he put “35,000,000 KRW (30,940 USD) transfer to Jeil Bank (Sang-deuk Lee) on July 20, 1993 and insurance payment”. Since 1996, Mr. Si-hyung declined to report and notify his assets, which is legally possible.

However, Mr. Si-hyung reported 7M KRW (6.2K USD) membership deposit to a fitness club as his total asset on August 30, 2002 when President Myung-bak Lee was elected as the mayor of Seoul. He later reported that he sold the membership and put the fund into his bank account as his asset change in 2004. He has not reported his assets after that.

Mr. Si-hyung reported 7,585,000 KRW (6,705 USD) in Shinhan Bank, 4,977,000 KRW (4,400 USD) in Woori Bank, 24,000,000 KRW (21,216 USD) in Daehan Life Insurance as his total assets the first year of President Lee’s presidency in April 2008. Since 2009, Mr. Si-hyung declined to report and notify his assets under the reason of maintaining independent living.

“It will be worth over 11B KRW (9.7M USD) once it is started to be developed”


Photo by OhmyNews

On July 2008, Mr. Si-hyung joined Hankook Tire where his elder brother-in-law (President Lee’s third son-in-law) Hyun-bum Cho worked as vice president. Starting as an intern of international sales department, he became a regular employee only in three months. One year later, he suddenly left this company in November 2009. When President Lee’s younger brother-in-law died in February 2010, Mr. Si-hyung joined the company DAS, a car seat supplier of Hyundai and Kia Motors where President Lee’s older brother Sang-eun Lee and President Lee’s late brother-in-law were major stake holders, in August 2010 as an international sales manager. Last March 1, he was promoted to the deputy department chief and now works as the planning team leader in Kyoungju headquarter. Mr. Si-hyung’s career as an office worker has been just about 2 years. It is almost impossible for an office worker like him to save enough money to buy a grandiose residence in a place like Naegok-dong.

The projection of high profitability through development in near future of the land Mr. Si-hyung purchased is also worthy of a suspicion. 20-17 Naegok-dong Mr. Si-hyung purchased had been originally in the greenbelt whose any form of modification is strictly regulated by the law. But the greenbelt designation of this land was lifted by President Lee himself in 2006 when he was the mayor of Seoul and the ‘Sooyang’ building was built subsequently. Currently, it is designated as a regional level development district and expects development ahead. A real estate expert of Gangnam area Mr. Ahn said “This area is just about to be developed since Seocho-gu set up a regional level development plan in 2010. If the plan is approved, the land price would pass at least 25,000,000 KRW (22,075 USD) per 1 pyung (3.3 square meters) as conservatively as possible. Mr. Si-hyung’s land is in such a great location even in this neighborhood that its price will easily pass 11B KRW (9.7M USD), a sure Jackpot!”

In a phonecall on October 6, Mr. Si-hyung confirmed that he had bougt the land and the building in May. To the reporter’s question if he bought the land for residential purposes, he replied “Yes. Uh, it’s a private matter and I don’t want to talk about it any more.” To the reporter’s another question why he purchased the land with the Executive Office of the President, he replied “I don’t want to answer that question. It’s a private matter.”

Useful link

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: