SEOUL: South Korean prosecutors said Wednesday 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 financial help he received from family members to help buy a plot for the home.
"Lee Si-Hyung has been cleared of suspicion of violating real estate laws," special prosecutor Lee Kwang-Bum told reporters.
"But we've decided to pass on documents to the National Tax Service due to suspicions of gift tax evasion."
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 the land on the southern edge of Seoul.
It was to be used to build a retirement home for Lee, who will leave office in February after serving the single five-year presidential term allowed under the constitution.
The lot was jointly purchased by the president's son Lee Si-Hyung and the presidential security service, which would have had to house its agents on the site to protect the former leader.
But prosecutors said the cost was not split evenly, with the security service paying too high a price from public funds 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 -- after providing security for a similar-sized loan for her son.
The presidential Blue House has vigorously 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.
The Blue House on Wednesday voiced "regret" at some of the prosecutors findings', arguing that they were based on an insufficient grasp of a complex procedure.
"The purchase of the president's retirement home... due to the special nature of the office and security requirements... is bound to be a far more complicated process than ordinary property purchases," it said in a statement.
It also branded as "unacceptable" the assumption that the collateral provided by the first lady amounted to a monetary gift to her son.
"As for the charges brought against officials of the personal security team, we will actively explain our stance in court," the statement added.
President Lee on Monday turned down a request by the prosecutors for a 15-day extension to their special investigation.
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