‘Cheonhwadongin7ho’ with 1200x profit in Seongnam, operating Starbucks with 7.4 billion KRW investment in Busan Gijang

Entrance of Hwacheon Daeyu asset management company's office, suspected of preferential treatment in the Daejang-dong development project in Bundang-gu, Seongnam-si, Gyeonggi Province. [Image source=Yonhap News]

[Asia Economy Yeongnam Reporting Headquarters Reporter Kim Yong-woo] It has been revealed that Cheonhwa-dongin No.7, a subsidiary of Hwacheon Daeyu, which is embroiled in controversy over preferential treatment allegations in the Daejang-dong development project, is operating a franchise coffee shop worth around 7 billion KRW in Busan.

The company invested about 10 million KRW in Hwacheon Daeyu's development project and received dividends exceeding 1000 times that amount, sparking controversy.

On the 24th, it was confirmed that Cheonhwa-dongin No.7, a subsidiary-level company of Hwacheon Daeyu Asset Management, which earned several hundred billion KRW in profits from the Daejang urban development project in Pangyo, Seongnam, Gyeonggi Province, is operating a Starbucks store in Cheonggang-ri, Gijang-gun, Busan, with an investment of over 7 billion KRW.

There are suspicions that the profits gained from the metropolitan Daejang-dong development project were invested in local real estate.

The owner of the Starbucks store operating in Gijang-gun has been confirmed to be the corporation Cheonhwa-dongin No.7.

According to multiple media outlets, Cheonhwa-dongin No.7 purchased a 1,042㎡ site from a corporation in Busan last September and operates a two-story Starbucks store equipped with a drive-thru.

The transaction price of the land and building registered in the real estate registry amounts to 7.45 billion KRW. The real estate industry estimates the current market value of the land and building to be around 8 billion KRW.

Cheonhwa-dongin No.7 is headquartered in Seocho-gu, Seoul, and was established in June 2015. It is known that a junior reporter of Mr. Kim, a former journalist and the largest shareholder of Hwacheon Daeyu, participated as a shareholder.

Cheonhwa-dongin No.7 invested about 10 million KRW in the Daejang-dong development project involving Hwacheon Daeyu and reportedly received dividends exceeding 12 billion KRW, more than 1000 times the investment.