Mr Lee (above), a former CEO who will be the country's first president with a business background, has denied any role in the fraud allegedly engineered by his former business partner Kim Gyeong Jun. -- PHOTO: ST

Lee, who takes office on Feb 25, was questioned for three hours late Sunday by three investigators, special prosecutor Kim Han Geun told reporters.

'Our interview focused on allegations that came out after (state) prosecutors completed their investigation,' he said.

The state prosecutors in early December had cleared Mr Lee of involvement in the fraud.

But parliamentary opponents of Mr Lee, citing what they said was new video evidence, voted two days before the Dec 19 presidential election to set up an independent probe.

Lee, 66, won a landslide victory despite the allegations - which he denies.

'I responded to the inquiry, based on my belief that the law should be strictly observed,' he was quoted as saying by Lee Dong Kwan, spokesman for his transition team.

Mr Kim said Mr Lee was questioned about his possible involvement in the 2001 case and any connections he had to an investment firm called BBK, which was linked to the fraud.

He gave no further details. But Yonhap news agency quoted sources as saying the special prosecutor is wrapping up the probe because the interview yielded little evidence.

Chosun Ilbo newspaper also said prosecutors have failed to obtain decisive evidence that could reverse the results of the previous investigation.

The special probe was therefore likely to clear Mr Lee of the charges when results are announced this week, it said.

Mr Lee, a former CEO who will be the country's first president with a business background, has denied any role in the fraud allegedly engineered by his former business partner Kim Gyeong Jun. He said he himself lost money.

Mr Kim, who was extradited from the United States, is on trial for stock manipulation, embezzlement of 38 billion won (S$59 million) and forgery.

Newspapers said Mr Lee was quizzed about remarks he made in a 2000 video clip in which he appears to claim to have created BBK.

The investigators reportedly decided that Mr Lee had been exaggerating his role to promote his business credentials.

The independent counsel is also investigating whether Mr Lee lied about his wealth and alleged ownership of real estate in an upmarket district of Seoul.

Sources said Mr Lee was asked about the true ownership of the land.

'With a clean conscience and respect for the law, President-elect Lee accepted the questions squarely,' his personal spokesman Joo Ho Young told reporters.

'We hope the special prosecutor will now make a fair decision according to the law.'

Any adverse finding by the probe would not stop Mr Lee taking office, but could damage his conservative party's prospects in the April general election.

As president, he would be immune from prosecution except for treason. -- AFP