South Korean prosecutors today said they would refer President Lee Myung-Bak's only son to the tax authorities as they handed down indictments over a land deal for Lee's retirement home.
Although Lee Si-Hyung was not among the three people indicted, prosecutors said his tax records would be checked for possible evasion of gift tax on funds he received from family members to help purchase a plot for the home.
"Lee Si-Hyung has been cleared of suspicion of violating real estate laws," special prosecutor Lee Kwang-Bum said.
"But we've decided to pass on documents to the National Tax Service due to suspicions of gift tax evasion," Lee said.
Those indicted on various breach-of-trust charges relating to the land deal 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 February 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 (USD 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.
President Lee on Monday turned down a request by the prosecutors for a 15-day extension to their special investigation.
The presidential Blue House has vigorously denied opposition claims of financial chicanery over the retirement home land deal.
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.