Use of Insider Information, Land Purchase After Retirement
Estimated Price Difference Profit of 1 Billion KRW
Prosecutors and Police Disagree on Application of Anti-Corruption Law
Coordination of Kim Kyung-hyup's Summons Schedule and Additional Search of Jeong Chan-min
17 Out of 111 High-Ranking Officials Referred
[Asia Economy Reporter Lee Gwan-ju] Lee Mo, a former head of the Administrative City Construction Agency (행복청, Haengbokcheong) accused of real estate speculation, has been handed over to the prosecution without detention. Investigations into high-ranking officials, including members of the National Assembly, are also gaining momentum.
The Government Joint Special Investigation Headquarters (Special Investigation Headquarters) on the morning of the 21st sent Lee to the prosecution without detention and simultaneously requested pre-indictment seizure preservation for the land he purchased (worth about 2 billion KRW).
Lee purchased a 622㎡ plot of land in Bongam-ri, Yeonseo-myeon, Sejong City, along with a lightweight steel structure built on the site, in November 2017, four months after his retirement. The nearby areas of Wachon and Budong-ri were scheduled to be designated as candidate sites for the Smart National Industrial Complex, raising suspicions of speculation due to potential benefits from peripheral development. The land, originally purchased for 980 million KRW, has now surged to 2 billion KRW. The head of Haengbokcheong is a vice-ministerial position responsible for the construction of the Sejong New City, and Lee is known as the highest-ranking official among current and former high-ranking public officials involved in speculation allegations.
The Special Investigation Headquarters believes Lee used insider information to purchase the land and previously applied for an arrest warrant at the end of April on charges of violating the Act on the Prevention of Corruption and the Establishment and Operation of the Anti-Corruption and Civil Rights Commission (Anti-Corruption and Civil Rights Commission Act). However, the investigation continued for over a month following the prosecution's request for supplementary investigation. During this process, differences between the prosecution and police surfaced. The key issue was the timing of the land purchase, "three months after Lee's retirement as head of Haengbokcheong." Based on the Anti-Corruption and Civil Rights Commission's interpretation, the Special Investigation Headquarters viewed that Lee obtained insider information during his tenure and purchased the land after retirement, thus applying the prohibition on the use of official secrets under the Act. However, the prosecution argued that the provision explicitly applies to "public officials," making the legal application ambiguous, differing from the police's opinion. Consequently, the police sent Lee to the prosecution without reapplying for an arrest warrant. A Special Investigation Headquarters official stated, "Considering the purpose of the law and the use of information obtained during public service, we believe the law is clearly applicable," adding, "We will have to observe future developments."
Investigations into 23 members of the National Assembly are also ongoing. The Special Investigation Headquarters has assigned cases to various city and provincial police agencies to begin investigations. Previously, through the Anti-Corruption and Civil Rights Commission's investigation, suspicions were raised against 12 Democratic Party members: Kim Ju-young, Kim Hoe-jae, Moon Jin-seok, Yoon Mi-hyang (all suspected of real estate name-trust), Kim Han-jung, Seo Young-seok, Lim Jong-sung (all suspected of using official secrets), Yang Yi-won-young, Oh Young-hoon, Yoon Jae-gap, Kim Soo-heung, and Woo Sang-ho (all suspected of violating the Farmland Act). Additionally, the police plan to summon Kim Kyung-hyup of the Democratic Party soon on charges of violating real estate transaction reporting regulations. Furthermore, regarding Jeong Chan-min of the People Power Party, who had an arrest warrant application rejected by the prosecution, the police are conducting supplementary investigations, including securing related materials through a search and seizure last week.
As of today, the Special Investigation Headquarters is investigating 736 cases involving 3,195 people related to real estate speculation allegations. Among them, 829 have been sent to the prosecution, and 364 have been decided not to be prosecuted or not to be charged. By type, 354 cases involving 1,724 people relate to speculation using insider information, and 382 cases involving 1,471 people relate to other real estate speculation such as planned real estate. Pre-indictment seizure and confiscation orders amounting to approximately 69.4 billion KRW have been approved by the court in 28 cases. Among the investigation targets, 111 are current or former public officials of grade 3 or higher, members of the National Assembly, local government heads, local council members, and public institution executives. Of these, including the former head of Haengbokcheong, 17 people (4 detained) have been handed over to the prosecution.
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