Kim Pledge to Sell His Company Questioned : Ownership: He says he sold the firm to an entrepreneur to avoid interest conflicts. But a bank has challenged the arrangement and he remains liable for a disputed loan.

In February, freshman Rep. Jay C. Kim (R-Diamond Bar) introduced himself to congressional colleagues during a committee meeting, saying: “I gave up my lifelong business and ran for Congress. Here I am.”

Kim had pledged to sell his engineering company to avoid even the appearance of impropriety when the firm bid on government contracts.

Whether Kim made good on his promise, however, has been questioned.

In an interview, he said he recently sold JayKim Engineers Inc. to real estate entrepreneur Sung Woo Min, for no money down.

But Min revealed that his ownership was challenged in May by the company’s major creditor. Sunwest Bank alleged that JayKim Engineers defaulted on a $1-million loan and asked a judge to appoint a receiver to protect the company assets.

“The bank had received information that indicated I did not own the entire company and that Mr. Kim still owned some of the shares,” Min said in a court declaration.

Bank officials declined to comment on the allegation, and public records do not clearly show whether Kim, despite a sale of some stock to Min in April, still owns part of the company.

What is clear, The Times found, is that Kim remains liable for the $1-million loan from Sunwest and has an active advisory role in the company.

Kim said in an interview that he sold the company because he “didn’t want any wrong perceptions that I still own the company and the company is doing a lot of government contracts.”

Yet he acknowledged that he has continued to participate in business planning for JayKim Engineers. In June, he said, he advised company officials about ways to pursue a $2.2-million contract to manage construction of private toll lanes on the Riverside Freeway in Orange County. And he said he has plans to move the company’s San Diego office to a different location--one of the buildings he and his wife own.

Department of Corporations records show that on April 1, Kim and his wife applied for and received permission to sell only 980 of the company’s 2,000 shares of stock to Min. This would indicate that the Kims retained controlling interest in the company--51%.

On April 8, minutes show Kim met as a committee of one and voted to return the balance of his stock to JayKim Engineers, giving Min 100% of the outstanding shares.

Later that day, however, minutes from a company executive committee meeting indicate that Kim continued to hold a major share of the company.

“Jay Kim announced that the sale of the company had been finalized with Sung Min owning 51% and Jay Kim owning 49%, which will be put in a blind trust,” the minutes said.

Asked later about the apparent contradiction, Kim said, “I don’t remember why I did that.”

Adding to the confusion are the statements of Kim and Min within the past week.

Min said he has owned 100% of the corporation since the first week in April. Kim said he sold only a piece of the company to Min in April, and sold the rest in May or June.

Kim said that he has not yet received “a penny” from the sale, but that Min has agreed verbally to pay him $3 million. He said he has a written commitment from Min to pay $500,000 within the next six months.

After 15 years of running the company, Kim said, “I’ve had enough. I just wanted out of it. . . . This way I don’t have to worry about a thing. I don’t care whether the company is broke, bankrupt.”