Lee's brother to be grilled Wednesday over 'retirement home scandal'

President Lee Myung-bak's eldest brother will be summoned this week for questioning in connection with a suspicious land deal for his brother's now-scrapped retirement home project, a special counsel investigating the case said Monday.

Lee Sang-eun is suspected of having played a role in the alleged irregularities by loaning some 600 million won ($542,000) in cash to his nephew and President Lee's only son, Lee Si-hyung, for the purchase of the land in which critics argue taxpayer money was used.

The elder Lee has been notified to appear before the counsel's office in Seocho-dong, southern Seoul 10:00 a.m. Wednesday, said special prosecutor Lee Kwang-bum, who is leading the investigation.

Lee Kwang-bum initially told Lee Sang-eun to appear before the office on Tuesday, but the 79-year-old chairman of automotive seat maker DAS opposed the summons date, citing health reasons.

The scandal involving the president and his family centers around allegations that the 34-year-old Lee Si-hyung and the presidential security service used taxpayers' money and violated real estate laws when jointly buying a plot of land last year for the retirement home, which was to be built in Naegok-dong on the southern edge of Seoul.

The cost was allegedly not shared evenly, with the security service paying too high a price for the site for security facilities in what opposition parties have claimed was a scheme to allow the son to profit from buying the site at a below-market price at the taxpayers' expense.

Lee Sang-eun is expected to be quizzed over why he lent the 600 million won in cash to his nephew, who currently works at DAS, instead of simply transferring it in bank accounts, the counsel said. Also, the elder Lee will be quizzed over where the money came from.

Meanwhile, Lee Si-hyung allegedly wrote a promissory note four days before borrowing the money from his uncle, a source close to Lee Sang-eun said Monday.

"Si-hyung visited the chairman Lee's house on May. 20, carrying the promissory note," the source said. "The cash was stored for business purposes and some more was still left even after the loan to Si-hyung."

During last week's questioning, Lee Si-hyung retracted an earlier statement that he borrowed the money on May 23, the counsel said. He changed the date to May 24, saying that there was some confusion in his memory.

Meanwhile, one of the closest aides to President Lee will also be summoned sometime this week for questioning in connection with the scandal, the counsel said, adding that details of Kim Paik-joon's potential involvement in the aborted deal needs to be further investigated.

Lee Si-hyung said he entrusted the 600 million won to another former presidential aide, Kim Se-wook, the counsel said. Kim, however, claimed that he "handled the money following the orders of Kim Paik-joon, a former secretary for general affairs."

Kim Paik-joon will face follow-up questioning over whether he directed the transaction and intervened in dividing the cost for the property deal.

The counsel will also summon Kim In-jong, a former chief of the presidential security service, sometime early this week for questioning over the land purchase. Kim is accused of handling the questionable transaction, along with another security service official, Kim Tae-hwan.

The two are facing dereliction of duty charges, where the agency paid too high a price to buy its portion of the land at the expense of tax payers' money.

Since the retirement home allegations were first raised by opposition parties, the presidential office has rejected suspicions it was an illicit scheme to help the president's son profit.

President Lee later scrapped the project and decided to move into his existing private house in Nonhyeon-dong in southern Seoul after leaving office next February. (Yonhap News)