Hwacheon Daeyu CEO "No Fraud... Met Lee Jae-myung Only Once in Court"

[Asia Economy Reporter Yoo Hyun-seok] Lee Seong-moon, CEO of Hwacheon Daeyu Asset Management (hereafter Hwacheon Daeyu), who has been embroiled in controversy over the Daejang-dong development project in Bundang-gu, Seongnam-si, Gyeonggi Province, has denied allegations of preferential treatment. Hwacheon Daeyu is suspected of receiving preferential treatment in the selection of the Daejang-dong development project operator and pocketing huge profits.

On the 18th, Lee Seong-moon, CEO of Hwacheon Daeyu, said in an interview with Hankook Ilbo, "Some quarters are spreading information that we made enormous profits through unethical means without any 'fact-checking,'" adding, "We bore all the risks of the project, and it is wrong to evaluate us solely based on the results (that we made a lot of money)."

Regarding the issue of huge dividends, the CEO emphasized, "Anyone who has managed a company knows very well that capital and operating expenses are different," and added, "The capital is only 50 million won, and from May 2015 to December 2016, about 35 billion won was sequentially invested until the 700 billion won project financing (PF) from financial institutions was secured." He continued, "All funds were deposited into the Seongnam Utddeul account and used as project expenses, so there is an accurate record."

Regarding the implementation of multi-family housing, he said, "When submitting the project plan, some sites were proposed by investors for their own use, and this was accepted and carried out as planned," emphasizing, "We set the sale price lower than other developers."

On the suspicion of preferential treatment for being quickly selected as the preferred negotiation partner in the private operator selection, he explained, "I heard that on the day of the evaluation, the evaluators were called at 7 a.m. and gathered during the day to conduct the evaluation," adding, "The short period was to prevent 'strange lobbying' caused by the leakage of the evaluator list."

Regarding questions about Cheonhwa Dongin (Nos. 2-7), the actual investors of SK Securities, which participated as a private operator along with Hwacheon Daeyu, he said, "Nos. 2 and 3 are relatives of major shareholder Mr. A (a former journalist), and Nos. 4 to 7 are mostly people who previously followed Mr. A to invest and suffered losses," emphasizing, "Mr. A distributed shares according to each person's role during the project."

When asked if he personally knows Gyeonggi Province Governor Lee Jae-myung, he said they have only met once in court. CEO Lee appeared in court as a witness in the case of Governor Lee Jae-myung’s violation of the Public Official Election Act.