Ethical Performance
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UN Secretary-General drawn into fraud investigation in Korea

June 2015

A regular hazard for people prominent in Korean society is the use relatives sometimes make of family bonds to further their interests.

For example, the sons of two former civilian presidents, Kim Young Sam, and Kim Dae Jung, were both imprisoned for bribery. Both took large bribes from businessmen who had been led to believe presidential favours would be forthcoming.

This is just part of a routine of political corruption that has seen every former South Korean president since the 1980s face corruption accusations or go to prison on such charges after leaving office.

Even so, there was surprise when United Nations Secretary-General Ban Ki-moon was caught up in fraud allegations and suspicions he may have played a role in a fraud planned by relatives.

The Secretary-General’s younger brother Ban Ki-sang and his nephew Bahn Joo-hyun are both suspected of deceiving Keangnam Enterprises, a Korean construction company, and its creditors while Bahn looked for potential buyers for a building in Hanoi.
Bahn pretended the Qatar Investment Authority (QIA), the country’s sovereign wealth fund, was interested in buying Keangnam Landmark 72, the tallest building in Vietnam, which was built and owned by Keangnam Enterprises, and dropped his uncle’s name in talks with the QIA.

The QIA later denied it had ever been interested in the property.

An email obtained by JTBC, a TV affiliate of Korea’s Joong Ang Daily newspaper, suggested the Secretary-General may have been aware of the proposed sale of the building and may have mentioned it during an official meeting with the emir of Qatar.

Keangnam reportedly tried to sell the Vietnamese building in 2013. At that time, the Secretary- General’s brother was a senior adviser at the construction company and recommended appointing US-based real estate agency - where the nephew was a managing director - as the exclusive agent for the sale. Keangnam paid a KRW 600 million advance to the real estate firm on condition it acquire a letter of intent from the QIA to buy the building.

Keangnam is now in receivership and under court administration. The court is attempting to validate documents related to the planned sale. But the QIA claimed the preliminary sales agreement was fabricated.

“They faked my signature and even put the QIA logo in the wrong side of the paper,” said a QIA official.

The court said it would consider criminal charges or damages if forgery is proven. 

Asia | Reputational Risk


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