[Asia Economy Reporter Ki-min Lee] On the 2nd, the prosecution investigating the preferential treatment allegations in the Daejang-dong development project in Seongnam City, Gyeonggi Province, filed an arrest warrant for Yoo Dong-gyu, former Planning Director of Seongnam Urban Development Corporation, who is known to have designed the business plan related to the Daejang-dong development.
The dedicated investigation team of the Seoul Central District Prosecutors' Office applied charges including breach of trust under the Act on the Aggravated Punishment of Specific Economic Crimes and filed the arrest warrant with the court on the same day.
Earlier, the investigation team executed a detention warrant for Yoo at a hospital in the morning and had been interrogating him for two days.
The investigation team, fearing that Yoo might refuse to appear citing health issues, obtained a detention warrant from the court around 9:26 a.m. and immediately secured his custody.
Originally, Yoo was scheduled to appear at the prosecution office at 10 a.m., but he complained of acute abdominal pain in the early morning and visited the emergency room.
The prosecution believes that during the process of promoting the Daejang-dong development project, Yoo failed to include a clause for recovering excess profits in the shareholder agreement of the implementing company 'Seongnam Eutteul,' which ultimately resulted in a large sum going to private operators and caused equivalent losses to Seongnam City.
Based on the Seongnam Eutteul shareholder agreement, Seongnam Urban Development Corporation, which holds the first-priority preferred shares of '50% + 1 share,' received dividends amounting to 183 billion KRW.
However, Hwacheon Daeyu and Cheonhwa Dongin 1 to 7, which hold only 7% of the shares, received a massive total dividend of 404 billion KRW because they had an agreement to pre-confirm the profits of Seongnam Urban Development Corporation.
The prosecution reportedly secured statements from corporation employees involved in the Daejang-dong development project indicating that Yoo prevented the inclusion of the excess profit recovery clause in the agreement at that time.
However, Yoo is said to have denied the allegations, claiming that he did not intentionally create such a profit distribution structure.
Additionally, the prosecution questioned Yoo about whether he received any portion of the profits from Hwacheon Daeyu as a quid pro quo, but Yoo reportedly asserted that he never received any money.
The Seoul Central District Court scheduled a pre-arrest detention hearing for Yoo on the 3rd at 2 p.m.
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