Suspicion of Daejang-dong Spreading Across Gyeonggi Province... Calls for Early Prosecution Intervention

Suspicion in Seongnam Baekhyeon-dong and Wirye
Reluctant Despite Calls for Forced Investigation

[Image source=Yonhap News]

[Asia Economy Reporters Kim Hyung-min and Jung Dong-hoon] As suspicions of preferential treatment in the Daejang-dong development spread throughout Gyeonggi Province, calls for an "early intervention by the prosecution" are rising. Other areas suspected of having similar preferential development treatment as Daejang-dong include Baekhyeon-dong in Seongnam City, Wirye New Town, Pyeongtaek in Gyeonggi Province, and Pangyo in Gyeonggi Province. All these development projects are evaluated to have been operated abnormally, with profit distribution structures similar to that of Daejang-dong.

On the 28th, voices from inside and outside the prosecution said, "It is time for the prosecution to take active measures." While the political circles are demanding a special prosecutor, even if a team is formed and investigations proceed quickly, it is uncertain whether the investigation can be completed before the presidential election. The Corruption Investigation Office for High-ranking Officials (CIO) also lacks personnel and does not yet have investigators specialized in real estate. Although the scope of direct investigation by the prosecution has been reduced due to amendments to the Prosecutors' Office Act, many analyses suggest that the Daejang-dong suspicions can still be directly investigated under current law. This is because the suspicions fall under corruption, public official crimes, and election crimes, which are among the six major crimes the prosecution can investigate.

However, the prosecution has been lukewarm. No raids have been conducted on related companies such as Hwacheon Daeyu and Seongnam Eutteul. The Central District Prosecutors' Office is only investigating cases such as the 5 billion KRW retirement pay of Assemblyman Kwak Sang-do’s son and the accusation against former Supreme Court Justice Kwon Soon-il, but has not touched the main case. This contrasts with former Prosecutor General Yoon Seok-yeol’s immediate order for a fact-finding investigation into the ‘accusation manipulation’ suspicions.

In the legal community, there are calls to swiftly track funds and initiate forced investigations such as raids, as key figures in politics and the legal world are deeply involved in the flow of funds surrounding Hwacheon Daeyu. This is why calls for Prosecutor General Kim Oh-soo’s decisive action are growing. Lawyer Kim Jong-min, a former chief prosecutor, said on social media, "The Daejang-dong case is an issue that requires the prosecution to form a large special investigation team and conduct a direct investigation based on what has already been revealed," adding, "If Prosecutor General Kim Oh-soo is waiting for the introduction of a special prosecutor and the CIO’s investigation, then the prosecution should shut its doors."

Meanwhile, the police are accelerating their investigation following the questioning of Kim Man-bae, the largest shareholder of Hwacheon Daeyu, the day before. Kim is suspected of breach of trust and embezzlement after borrowing 47.3 billion KRW from Hwacheon Daeyu under the name of a long-term loan and failing to repay it. The police also plan to summon Lee, the representative of Cheonhwa Dongin, an affiliate of Hwacheon Daeyu, as a witness after coordinating schedules. The National Police Agency’s National Investigation Headquarters (NIH) is also expected to join the investigation.

On the same day, the Committee for the Protection of the Common People’s Livelihood filed a complaint with the NIH against Gyeonggi Governor Lee Jae-myung, Seongnam Urban Development Corporation, Kim Man-bae, and others on charges including bribery and embezzlement related to the ‘Daejang-dong development preferential treatment suspicions.’ The committee stated, "Absurd profit distributions from real estate development investments and the incomprehensible 5 billion KRW retirement pay are continuously emerging as suspicions surrounding the Daejang-dong development," and urged, "We demand a thorough investigation to resolve the suspicions and strict punishment if criminal facts are revealed."