Pick for South Korean presidency off legal hook

By Jonathan Thatcher

SEOUL (Reuters) - An investigation into possible fraud by the favorite to become South Korea's next president, and the one issue that could spoil his chances, is likely to be dropped for lack of evidence, local media reported on Monday.

The scandal is widely seen as the only serious threat to Lee Myung-bak, a conservative former construction boss who bills himself as the "economy president", cruising to victory in the December 19 vote and ending a decade of liberal rule over Asia's fourth largest economy.

Two leading dailies, the Chosun Ilbo and the JoongAng Ilbo, said prosecutors had been unable to find any evidence to back allegations by a former business partner of Lee that he was involved in share price manipulation.

The prosecutors office declined to comment but is expected to announce its initial findings in the probe on Tuesday or Wednesday.

The ruling liberal party is trying to push in parliament for an independent counsel to investigate the case but is likely to find it a struggle to win enough votes to support its motion because it does not hold an outright majority.

In another boost to the conservative front-runner, an official with his Grand National Party said a popular veteran politician would later in the day announce his support for Lee.

Chung Mong-joon is a son of the founder of the giant Hyundai Group whose construction arm Lee once ran before he turned to politics. He was a presidential candidate in the 2002 election.

As the campaign got into full swing this week, one opinion poll showed Lee would win about 40 percent of the vote for the single five-year term, some 20 points ahead of his nearest rival, another conservative who is running as an independent.