Suspect in '5 billion won club' appears at warrant review

Former special counsel Park Young-soo leaves the Seoul Central District Court in Seocho District, southern Seoul, after his warrant review hearing ended on Thursday afternoon. [YONHAP]

Former special counsel Park Young-soo appeared at a warrant review hearing held Thursday morning to determine whether he should be arrested over corruption allegations tied to a prominent land development scandal.

Park, who formerly served as the chair of Woori Bank’s board of directors, is suspected of receiving 800 million won ($611,000) in bribes from private developers in return for lending Woori Bank’s support to the Daejang-dong development in 2014.

In their warrant request, prosecutors alleged that Park and his assistant Yang Jae-sik were promised profits of 20 billion won and two properties from private developers involved in the project, but that the amount decreased to 5 billion won after the bank downsized its stake in the project.

The former special counsel told reporters before entering the Seoul Central District Court that he is “confident” that “the truth will be revealed soon” as he denied accusations that he used his position at the bank to support the project.

His warrant review hearing began at 10 a.m. and ended approximately three and a half hours later.

Park rose to prominence after being appointed as the special counsel leading the investigation into the corruption case involving former President Park Geun-hye in 2017.

She was eventually removed from office by the Constitutional Court following her impeachment and later indicted and convicted of multiple charges, including corruption and abuse of power.

Prosecutors believe that former special counsel Park is one of several individuals in the so-called “5 billion won” club of people who were each promised 5 billion won by asset management company Hwacheon Daeyu.

Despite only having 50 million won in capital and no prior record of participating in real estate developments, the company was able to join the 1.5 trillion-won Daejang-dong development launched by the Seongnam city government through a joint public-private consortium led by KEB-Hana Bank.

Hwacheon Daeyu invested only 350 million won in the project and raked in 400 billion won in profit from the development, while the Seongnam Development Corporation, which is owned by the city government, earned only 183 billion won from its 25-billion-won investment in the project.

Hwacheon Daeyu also made 300 billion won in apartment sales from the development, while its Cheonhwa Dongin affiliates reaped an additional 400 billion won in profits.

The scandal over Hwacheon Daeyu’s involvement in the Daejang-dong development has attracted attention because it launched during Democratic Party leader Lee Jae-myung's tenure as the mayor of Seongnam, Gyeonggi, where the development is located.

Other figures who were allegedly promised 5 billion won by the company include former PPP lawmaker Kwak Sang-do and former Prosecutor General Kim Soo-nam.

Kwak was accused by prosecutors of accepting a bribe from Hwacheon Daeyu disguised as a 5-billion-won severance package to his son, who left the company in March 2021 after working as a mid-level employee for five years and nine months.

The payout was more than 200 times his legally entitled severance payment.

Kwak’s case is currently on appeal by prosecutors after the Seoul Central District Court acquitted him of bribery in February.

The court’s decision on the warrant request against Park is expected to be released Thursday night.

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