Digging up the connections

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Digging up the connections

 The Pandora’s Box that is the Daejang-dong development project in Seongnam has been opened. Suspicions of illicit graft have been found with Seongnam Development under the municipal administration and private developer Hwacheon Daeyu, both of which were shareholders of Seongnam Garden devoted to the Daejang-dong development. Documents showed that Kim Man-bae — the sole owner of Hwacheon Daeyu — visited the office of Supreme Court Justice Kwon Soon-il around the time of the top court’s verdict on a case involving Gyeonggi Governor Lee Jae-myung, who was charged with violating election law.

After prosecutors filed for an arrest warrant for Yoo Dong-gyu, former acting president of Seongnam Development on charges of embezzlement, he was arrested and detained. Yoo would be the first to face criminal charges on the Daejang-dong scandal. Law enforcement authorities have a lot of work ahead of them.

Yoo was central in designing the development model. While heading the city development corporation, he led the project building apartment complexes across several plots of land amounting to 958,678 square meters (237 acres) and packaged it as a “public development,” while funneling the profits to a select few associated with Hwacheon Daeyu and its affiliate Cheonhwa Dongin. How much Yoo earned from assigning the project to Seongnam Garden — a consortium of Seongnam Development and Hwacheon Daeyu — and organizing the shareholders and dividend allocation and whether he really has a stake in Cheonhwa Dongin through a borrowed name must be identified.

In a prosecutorial testimony, Jung Young-hak — an accountant and shareholder of Cheonhwa Dongin — suggested that Yoo owned half the company. Gyeonggi Gov. Lee claimed that Daejang-dong was an exemplary public project under his mayorship. Lee also denied he was close to Yoo.

Kim Man-bae — a former journalist and the owner of Hwacheon Daeyu — is suspected of trying to lobby to save Lee as he visited Kwon’s office eight times in 2019 when Lee’s case was at the Supreme Court. Rep. Jun Joo-hye of the opposition People Power Party claimed Kim frequented the court before and after its ruling in favor of Lee. Later, Kwon became an advisor to Hwacheon Daeyu after retirement in September last year, two months after the not guilty ruling. Kwon received 15 million won a month in advisory fees from Hwacheon Daeyu.

The investigation into the Daejang-dong scandal has only just begun, but suspicions are snowballing. Law enforcement authorities must devote themselves to the investigation without any influence from the sitting power.
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