Ruling bloc divided over prosecutors' move to dismiss stock manipulation charges against first lady

South Korea's conservative ruling bloc on Friday was divided over the prosecutors' recent decision to not indict first lady Kim Keon Hee over her alleged involvement in a stock price manipulation scandal involving a local BMW dealer.

The Seoul Central District Prosecutors Office on Thursday dismissed the charges that the first lady violated the Financial Investment Services And Capital Markets Act. The announcement came some four years after the probe into allegations that Kim's stock trading accounts were used in a massive stock price manipulation scheme involving Deutsch Motors over a decade ago. Prosecutors said Kim was unaware that her accounts were being used in the scheme.

Ruling People Power Party Floor Leader Rep. Choo Kyung-ho, who is viewed as a pro-Yoon faction within the conservative bloc, upheld the prosecutors' decision saying that it was based on their efforts to carry out a fair investigation.

"I believe that the prosecutors made efforts to announce a fair result of the investigation based on evidence and legal principles," Choo told reporters Friday at the National Assembly in western Seoul.

"The results will be judged by the people. At the moment I believe that the prosecutors tried their best and made efforts to announce results that request for the understanding of the people," he added.

However, Shin Ji-ho, the head of the ruling People Power Party’s strategic planning department and a well-known aide of the ruling party's current Chair Han Dong-hoon, said in a Friday radio interview that the process leading up to the prosecutors' decision is "doubtful."

"Prosecutors have held two rounds of investigation review committee meetings (to deliberate) on the luxury bag case, but did not hold such (review meetings) for this case which is deemed as more serious, which is very doubtful," Shin said in a MBC radio interview.

An independent review committee for the Supreme Prosecutors' Office had held two rounds of meetings tied to the first lady's acceptance of a Dior handbag worth 3 million won ($2,248) from a Korean American pastor in 2022. However, similar reviews for the stock manipulation scandal have yet to be held.

Shin's remarks are in line with Han's comments to the reporters Thursday saying that it would be "necessary" for the conservative bloc to see whether the prosecutor's decision not to indict the first lady over the stock manipulation scandal "could convince the public."

On the other side of the political sphere, the main opposition Democratic Party said Friday it would take necessary steps to impeach Prosecutor General Shim Woo-jung over the prosecution's non-indictment decision.

"The party leadership discussed the issue of impeaching the prosecutor general and concluded to go ahead with the plan," Jo Seoung-lae, a senior Democratic Party spokesperson, told reporters after a Supreme Council meeting.

Jo added that the timeline of the plan and the impeachment will be announced after further discussion with the party leadership.

The latest divide follows People Power Party Chair Han Dong-hoon's calls for the first lady to scale back her public activities and officially explain multiple allegations raised against her.

Such actions from the first lady would help the conservative bloc regain public trust, Han stressed Thursday. The ruling party leader also said that the presidential office must carry out a personnel reshuffle in order to debunk claims that the first lady has connections with multiple officials in the presidential office and was thus able to inappropriately meddle in state affairs.

The ruling party leader stepped up his calls, a day after the conservative bloc won two of the five seats in Wednesday's regional by-elections in its respective strongholds -- Busan's Geumjeong District and Incheon's Ganghwa County – despite President Yoon Suk Yeol’s approval rating having hit an all-time low. The victory has cemented Han’s leadership within the ruling party despite his apparent rift with Yoon and the pro-Yoon faction within the conservative bloc, observers say.