Lee Jae-myung Actively Refutes 'Daejang-dong Allegations' Pointing to Lee Nak-yeon
Lee Nak-yeon: "Do Politics for the People, Not for Me"
Democratic Party presidential candidate Lee Jae-myung, Governor of Gyeonggi Province, actively refuted the preferential treatment allegations related to Hwacheon Daeyu surrounding him, directed at former leader Lee Nak-yeon. [Image source=Yonhap News]
[Asia Economy Reporter Han Seung-gon] Lee Jae-myung, Governor of Gyeonggi Province and a presidential candidate of the Democratic Party of Korea, actively refuted the preferential treatment allegations surrounding Hwacheon Daeyu related to the Daejang-dong development project he promoted during his tenure as mayor of Seongnam.
In particular, he actively explained by disclosing investment details in response to the attacks from former party leader Lee Nak-yeon. Lee Nak-yeon counterattacked Lee Jae-myung's claims, urging him to look toward the people and party members in his politics.
On the 21st, Lee Jae-myung posted on his Facebook titled "A Request to Candidate Lee Nak-yeon," saying to the former leader, "You are a senior member of the Democratic Party with outstanding capability and experience, having majored in law at a prestigious university, worked as a central district reporter, and held high public offices. However, it seems you hold views (misunderstandings) about the Daejang-dong development that I cannot possibly accept, so I would like to say a few words."
He continued, addressing Lee Nak-yeon, "Please restrain your aides who attack comrades by blindly following the false claims of conservative media and corrupt opposition parties," and urged, "If it is difficult to officially apologize for the clear misinterpretation of investment returns and the claims riding on conservative media, I hope you at least express regret."
Lee then actively refuted related allegations by revealing the capital and business structure of the Daejang-dong development project at the time. Regarding the first investment details, he explained, "Seongnam City invested 2.5 billion KRW in the Daejang-dong project (which was later fully recovered), and private businesses such as Hana Bank and others (consortium) bore the entire project cost of over 1 trillion KRW. The total capital of the private consortium was tens of trillions of KRW, including one newly established asset management company with a capital of 50 million KRW."
From the perspective of 'profit and risk burden,' he emphasized that Seongnam City had a structure where "even if the real estate market slumps causing project failure or losses, it would unconditionally receive a fixed pre-acquisition of 550.3 billion KRW."
Regarding private investors, he added, "Profit had to be made for returns to occur," and "At the time, the private sector's profit was expected to be around 180 billion KRW, with the possibility of increased profits if housing prices rose, but they bore all the risk of losses if prices fell."
He also noted that the years "2014-2015, when the Daejang-dong development project was promoted, were a period of real estate downturn," and that during the development, they were criticized as 'abusive,' 'tyrannical,' or 'like communists.' Regarding the criticism that 'private participants' profits are too large,' he countered, "It is unreasonable to criticize that we failed to recover more because we did not predict housing prices would double. I do not have the ability to accurately predict real estate fluctuations."
He further criticized, "Even if not the Chosun Ilbo, it is not appropriate for the party responsible for the real estate policy failure that caused housing prices to skyrocket and doubled the expected development profits to say such things." He added, "Among the three private consortiums, none offered more than 550.3 billion KRW, so we could not have received more."
Regarding the question of 'why public development was not pursued,' he explained, "Seongnam Urban Development Corporation was legally restricted by the ratio control of corporate bonds, and Seongnam City was legally unable to raise project funds due to local bond issuance limits," emphasizing, "The People Power Party, which took bribes from corrupt construction forces and made them give up public development, and the People Power Party president MB who ordered private development causing public development abandonment, as well as LH and Gyeonggi GH under People Power Party member Nam Kyung-pil, would never allow public development."
On the 'private participant profit rate,' he said, "The Chosun Ilbo, which surely knows the difference between investment and capital, treats the public like 'insiders' and agitates by talking about a 10,000% profit rate, which is what they have always done," but criticized, "However, it is hard to understand that Candidate Lee, who majored in law, cannot distinguish between capital and investment."
He added, "If a company with 100 million KRW capital invests 50 billion KRW and earns 25 billion KRW, the investment return rate is 50%, not 25,000%. Even if the capital is 1 trillion KRW, the investment return rate is still 50%, not 2.5%," and urged, "Please acknowledge, encourage, and recommend this unprecedented case that recovered 550.3 billion KRW of development profits in a groundbreaking way without precedent in law. Help us establish a legal system to recover development profits for the people."
In response to Lee Jae-myung's claims and criticisms, former leader Lee Nak-yeon counterattacked, targeting Lee Jae-myung by saying, "Look toward the people and party members, not me," and demanded clarification of the facts related to the Daejang-dong project.
On the afternoon of the 21st, Lee Nak-yeon posted on his Facebook, sharply stating, "Governor Lee Jae-myung, do not shift the problem to me, Lee Nak-yeon, but explain it to the people and party members."
He criticized Lee Jae-myung, saying, "Many people and party members have doubts. You should humbly and accurately explain until those doubts turn into trust."
He added, "We will fight together against the malicious attacks of conservative media and the People Power Party," but pointed out, "(However) dragging me into this to distort and attack it as an internal fight when the facts can be clarified goes against the spirit of one team."
Lee Nak-yeon repeatedly criticized Lee Jae-myung's side and emphasized his determination for regime re-creation. He said, "I believe there are no Democratic Party members or supporters who will be deceived by the frame attempted by Lee Jae-myung's side," and "Whoever becomes the Democratic Party's presidential candidate, I will fulfill the historic duty of defeating the People Power Party candidate and launching the 4th Democratic government."
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