[Seocho-dong Legal Talk] Rumors of Discord Among Key Figures in Daejang-dong Allegations... Will It Escalate into a Battle of Revelations?

[Image source=Yonhap News]

[Asia Economy Reporter Kim Hyung-min] "Do you trust me? I don't trust you."

In the Netflix drama "Squid Game," which took the world by storm, Kang Sae-byeok (played by Jung Ho-yeon) says this to those she forms a one-night alliance with.

A game where you must kill others and survive as the last one standing to finish. Nighttime there is both an opportunity and a crisis. Every night when the dormitory lights go out, participants wage war against each other. Kang Sae-byeok forms a one-night alliance with Seong Gi-hun (played by Lee Jung-jae) and others to protect each other. But that doesn't mean they can sleep peacefully. Even as allies, there's no guarantee they won't point a knife at your neck. The atmosphere there is so cold that distrust and betrayal cannot be ruled out.

This is common in reality as well. Especially in organized crime involving large sums of money. The distribution of money cannot satisfy everyone, and cracks inevitably form within the organization. A lawyer who has dealt with many such crimes said, "People tend to lose their senses when they see money."

The currently heated "Daejang-dong Development Special Favor" suspicion case is in a similar atmosphere. Rumors of discord among key figures are circulating. Based on the circumstances revealed so far, it appears that the main figures did indeed quarrel with each other.

The gist of the discord rumors is roughly that "there were disagreements during the process of dividing the profits from the Daejang-dong development, which caused a rift." Specifically, it is reported that key stakeholders of Hwacheon Daeyu Asset Management (Hwacheon Daeyu) experienced conflicts over profit distribution starting around 2019 after earning larger-than-expected returns. There were especially disagreements over who should bear various costs.

The content related to this also appears in the recordings submitted to the prosecution by accountant Jeong Young-hak, making the discord widely accepted as fact. Accountant Jeong recorded conversations of key figures in preparation for future issues, including attempts to pin all the blame on him. A total of 19 recordings were submitted to the prosecution.

There were also reports that former Seongnam Urban Development Corporation Planning Director Yoo Dong-gyu slapped accountant Jeong during a demand for a large dividend last year. According to the recordings and other sources, Yoo had internal discussions to receive 70 billion won from the Daejang-dong development profits. Yoo initially agreed with Hwacheon Daeyu major shareholder Kim Man-bae to split the development profit shares equally but later decided after further discussions to receive 70 billion won through a separate company called "Yuwon Holdings."

Yoo's side denied this. His legal representative, lawyer Kim Guk-il, said, "It is true that he slapped (accountant Jeong) while intoxicated, but it is unrelated to this case." He added, "There was a dispute between Kim Man-bae and Jeong Young-hak over who should bear the funds for joint expenses, and Yoo Dong-gyu mediated and was recorded." Regarding the 70 billion won, he said, "It seems to be a misunderstanding, and the 70 billion won agreement is groundless," adding, "The actual borrowed amount was 1.18 billion won."

Even if Yoo's explanation is true, accountant Jeong's feelings likely remained uncomfortable in many ways. Being slapped naturally breeds ill feelings toward the person who struck him. From Kim Man-bae's perspective, it seems possible that he was displeased with Yoo receiving a slightly larger share of the profits.

Usually, when there is discord and noise within a criminal organization or gang, the next step is often a public exposure battle. Each party confesses all the facts they know to avoid taking all the blame. In the legal community, there is talk that the Daejang-dong suspicion might already have signaled the start of such a public exposure battle with accountant Jeong revealing everything he has.

June 3 could be a turning point. On that day, former director Yoo will undergo a pre-trial detention hearing (warrant review) at the Seoul Central District Court. He stands at a crossroads regarding detention. If he is detained, his stance of denying all allegations may change. If a public exposure battle ensues, it would certainly be advantageous for the prosecution to clarify the suspicions. From then on, it will be a matter of the prosecution's capability. However, the prosecution is under scrutiny for failing to find the mobile phone Yoo reportedly discarded near his home. It remains to be seen whether they can seize a chance for a turnaround in such circumstances.