Three of the six directors of Diplomat National Bank here are attempting to continue the bank's association with its former chairman, Charles C. Kim, who has been charged by the Securities and Exchange Commission with aiding a secret takeover of the bank by South Korean interests.
Last week, the three directors mailed documents asking stockholders of the bank to elect two new directors who they said would also be favorable to allowing Kim, who now is a consultant to the bank, to perform unspecified functions for the bank.
Kim was barred by a court order in September from performing managerial functions for the bank after the SEC charged that he had fraudulently helped South Korean agent Tongsun Park and an aide to South Korean evangelist Sun Myung Moon secretly obtain more than half of Diplomat National Bank's stock.
The three directors said in their mailing to the bank's stockholders that Kim should be permitted to continue with the bank because he is "important for the economic well-being and continued growth of the bank."
At the same time that the three directors were appealing to the stockholders on Kim's behalf, the bank received a $2 million deposit - equal to about one-fourth of the bank's present total deposits - from Sun Myung Moon's Unification Church. According to one informed source, the three directors supporting Kim have cited this large deposit from the Unification Church as evidence of Kim's effectiveness on behalf of the bank.
Although the court order obtained by the SEC bars Kim from resuming his position as an officer of the bank without approval of the comptroller of the currency or from engaging in other managerial functions, Robert N. Serino, director of enforcement for the comptroller, said it is "possible" Kim could legally solicit deposits or new loan business for the bank.
In addition, Philip N. Smith, the bank's lawyer in proceedings before the SEC, said the order would allow Kim to act as a "marketing consultant."
"We have to determine," Serino said, "if the intent of the order was to keep his (Kim's) influence out of the bank even on a behind-the-scenes basis, and, if so, if these people (the proposed new directors) should be kept out of the bank."
Diplomat was organized in 1975 to cater particularly to Asians living in Washington. In its brief existence, the bank, which has offices at 2033 K. St., NW, has repeatedly figured in newspaper stories and congressional investigations of South Korean influence-buying schemes here. The bank's deposits at the end of last year stood at $7.2 million.
In its complaint, the SEC said Kim and others defrauded those who purchased stock in the bank when it was organized by concealing or misrepresenting its true ownership and failing to disclose the fact that 45 per cent of the bank's demand, or checking account, deposits came from Moon's Unification Church International.
The account, according to the SEC, was maintained by Bo Hi Pak, president of the Korean Cultural and Freedom Foundation and secret purchaser of 43 per cent of the bank's stock.
Pak is interpreter and a top aide to Moon, who is said by the House Subcommittee on International Organizations to have maintained "Operational ties" with the Korean Central Intelligence Agency.
Kim's role at the bank has been the object of a simmering dispute within the board of directors since Kim resigned as chairman under pressure last April. The bank has continued to pay Kim $33,000 a year as a consultant, although the September court order prevents the bank from renewing his consultant contract when it expires in April.
When the bank's current chairman, William Chin-Lee, told Kim to move his offices out of the bank, the three directors who favor Kim - Dr. Magin T. Quiambao, Harry J. Zink, and Dr. Soo Young Oh - wrote to Lee:
". . . it is our belief that Dr. Kim's presence at the bank has a reassuring effect on depositors and therefore is beneficial to the bank. We believe that not permitting Dr. Kim to remain on the premises would run the risk of creating an unsettling effect among the depositors, which might precipitate a run on deposits . . ."
In addressing stockholders, the three directors said in proxy solicitations that they and the proposed new directors intend to allow Kim to "perform such functions for and on behalf of the bank which are not in contravention of the order entered with respect to the bank."
One of the proposed directors, Phillip D. Grub, professor of international business at George Washington University, said he had been asked to serve on the board by Kim, whom, he knew as a student.
"I've seen nothing in his actions to have any qualms about him as chairman of the bank, a position which he had nine months ago," Grub said. However, Grub said he would evaluate facts the board might have before reaching any conclusions on whether to vote to reinstate Kim as chairman.
Grub said he was not aware of the court order preventing such an action without approval of the comptroller. He said Kim told him he was not aware of the secret ownership of the bank.
Describing Kim as a good administrator, Grub said, "Dr. Kim was one of the organizers of the bank. I think it's his baby."
The second candidate, Diosdado Yap, president of Capital Publishers Inc., which publishes congressional directories, said he was never asked if he supported Kim and was surprised when he read in the proxy material that he was a supporter.
"I have no thoughts about Dr. Kim," he said. "As far as I'm concerned, I'll see what is what. If I smell a rat, I have no interest in the matter," Yap said.
One signature on the proxy solicitation appears to be that of Cheyung Choi, named in congressional testimony last October as a supplier of goods to the Korean Central Intelligence Agency.
The former KCIA official who gave the testimony also said he gave Choi $400,000 from Tongsun Park, who is under indictment for his alleged role in the Korean influence-buying scheme.
The proxy material says stockholders should send their votes to Kim, any of the three directors who initiated the proposal or Napoleon Lechoco.
Lechoco is a Filipino lawyer who held that country's ambassador to the United States at gunpoint for 10 hours in the ambassador's office here in 1974. Last May, a jury found Lechoco innocent of kidnaping and other crimes in connection with the incident on grounds of temporary insanity.