Prosecutors Investigate Kwak Sang-do's Son for 5 Billion Won 'Hwacheon Daeyu Severance Pay' (Comprehensive)

[Image source=Yonhap News]

[Asia Economy Reporter Kim Hyung-min] The prosecution has launched an investigation into the son of former People Power Party lawmaker Kwak Sang-do, who worked at Hwacheon Daeyu Asset Management (Hwacheon Daeyu), embroiled in allegations of preferential treatment in the Daejang-dong development project in Seongnam, Gyeonggi Province, and received a controversial severance pay of 5 billion KRW.

On the 27th, the Seoul Central District Prosecutors' Office assigned the election law violation complaint against Lee Jae-myung's campaign to the Public Investigation Division 2, and the bribery complaint to the Economic Crime Criminal Division.

The Public Investigation Division 2 is handling the case in which Lee Jae-myung's campaign filed a complaint against People Power Party floor leader Kim Ki-hyun and others, while the Economic Crime Criminal Division is handling the case in which former Supreme Court Justice Kwon Soon-il was accused of post-facto bribery and other charges.

The prosecution is expected to formulate a specific investigation plan after reviewing the complaints.

According to political circles and Hwacheon Daeyu, Kwak's son, Kwak Byung-chae (32), joined Hwacheon Daeyu in June 2015 and worked in the compensation team before resigning last March.

He received a salary ranging from 2.3 million KRW to 3.8 million KRW before tax after joining, and upon resignation, he received 5 billion KRW under the titles of performance bonus, consolation money, and severance pay. The actual amount received after tax was reported to be 2.8 billion KRW.

Both Kwak and Hwacheon Daeyu claim that the 5 billion KRW was paid legitimately, but the amount far exceeds the usual level, so the controversy has not subsided. The ruling party has also raised suspicions of bribery.

In a statement released the day before, Kwak said, "Since 2018, my health has deteriorated to the point where normal work performance became difficult," and added, "I understand that the company recognized that excessive work was the cause and decided on the performance bonus and consolation money accordingly."

Hwacheon Daeyu also explained that the payment included a performance bonus for the success of the development project and severance consolation money for the illness Kwak Byung-chae suffered due to heavy workload.

Following the prosecution, the Corruption Investigation Office for High-ranking Officials (CIO) may also start an investigation. Under the CIO Act, members of the National Assembly are included as high-ranking officials.

The civic group Judicial Justice Citizens' Action is scheduled to file a complaint with the CIO on the 28th, accusing Kwak and his son of bribery under the Special Criminal Act. The CIO is expected to review the complaint and decide whether to investigate.