Some faces are familiar in new development scandal

Politics

Published: 31 Aug. 2022, 19:24

Some faces are familiar in new development scandal

The Seocho District headquarters of Hoban Construction, a contractor in the Wirye New Town project, was raided by prosecutors on Wednesday. [YONHAP]

Prosecutors on Wednesday raided the offices and homes of people involved in the Wirye New Town development as they investigate allegations of preferential investor treatment in the project.

The Wirye New Town development, which spans the southern portion of Seoul’s Songpa District and northern Sujeong District, Seongnam, Gyeonggi, has been called “the prequel of Daejang-dong" for its similarities with a later development project in the city of Seongnam that became a big scandal.

Both Wirye and Daejang-dong, which started in 2013 and 2015 respectively, were led by mixed public-private consortiums. Several people have played roles in both developments, including Yoo Dong-kyu, the former acting president of the Seongnam Development Corporation, as well as lawyer Nam Wook and accountant Jeong Young-hak.

Nam reportedly made 100.7 billion won ($84.14 million) in Daejang-dong through his company, an affiliate of minor asset management company Hwacheon Daeyu, which itself raked in a profit of 57.7 billion won on an investment of 49.95 million won — a mere 1 percent stake in the project.

Last September, Jeong provided investigators with recordings and photos that he said documented a conspiracy by the owners and main shareholders of Hwacheon Daeyu and its affiliates to give 404 billion won in profits from the Daejang-dong development project and hundreds of billions of won in apartment sales revenue to officials at Seongnam Development Corp. in return for preferential treatment in the Daejang-dong development project.

Prosecutors suspect that Yoo, who has been indicted on charges of bribery and breach of trust in the Daejang-dong scandal, used internal information to also give preferential treatment to private investors in the Wirye New Town project in return for bribes.

Yoo has already been indicted by prosecutors for allegedly receiving a 352 million won bribe from Jeong Jae-chang, a major shareholder in Wirye Asset Management, Nam Wook and others during the development of Wirye New Town in 2013.

Over 20 places were raided by prosecutors on Wednesday, including the offices of Hoban Construction, Wirye Asset Management, several realtors as well as the residences of suspects in the case.

Hoban Construction was a contractor in the Mirae Asset Consortium, the group of private investors involved in the Wirye New Town development.

Prosecutors suspect that Yoo and other officials in the Seongnam Development Corporation played a hand in leaking information about the public company’s plans to attract private investment for the Wirye New Town project and also influenced a change in the project’s public offering guidelines to favor the Mirae Asset Consortium.

BY MICHAEL LEE [lee.junhyuk@joongang.co.kr]