[Daechang-dong Investigation Fallout] One Day After Kim Man-bae's Detention Denial, Search and Seizure Conducted (Comprehensive)

On the 15th, the prosecution launched a sudden search and seizure operation at Seongnam City Hall in Gyeonggi Province. They are currently securing related materials from the department responsible for permits and approvals for the Daejang-dong development project. This move is interpreted as a response to criticisms during the previous day's National Assembly Legislation and Judiciary Committee audit that the search and seizure at Seongnam City Hall was being delayed, as well as the controversy over a sloppy investigation following the rejection of the arrest warrant for Kim Man-bae, the major shareholder of Hwacheon Daeyu Asset Management (Hwacheon Daeyu).

The prosecution investigating the Daejang-dong development lobbying and preferential treatment allegations is conducting a search and seizure at Seongnam City Hall on the morning of the 15th.
[Image source=Yonhap News]

Investigation Team Conducts Search and Seizure at Seongnam City Hall

The dedicated investigation team of the Seoul Central District Prosecutors' Office (led by Deputy Chief Prosecutor Kim Tae-hoon) sent prosecutors to Seongnam City Hall around 9 a.m. to secure related materials from the department involved in the Daejang-dong development project. Seongnam City is the institution holding various permits and approvals for the Daejang-dong project. Documents such as the 'Review Report on Investment Approval for Corporations Related to the Promotion of the Daejang-dong Development Project,' prepared by the Seongnam City Administrative Planning Bureau in January 2015, and official documents personally approved by then-Mayor Lee Jae-myung remain on record.

It is known that Mayor Lee personally approved matters related to the Daejang-dong project, including feasibility studies, urban development zone designation plans, and plans for recovering service fees during the development process. This has led to continuous suspicions that Mayor Lee was involved in the Daejang-dong development project in some way. Accordingly, the prosecution plans to summon an employee from the Administrative Planning Bureau who was involved in preparing the relevant documents at the time as a witness for investigation.

This search and seizure operation was conducted just one day after Seoul Central District Prosecutor General Lee Jung-soo stated at the National Assembly Legislation and Judiciary Committee audit that Mayor Lee is "under investigation and within the scope of the inquiry." However, while investigations into Seongnam Urban Development Corporation, where former Planning Director Yoo Dong-gyu worked, and Hwacheon Daeyu, where Kim is a major shareholder, have progressed rapidly, the investigation into Seongnam City and the Seongnam City Council, which had jurisdiction and oversight, has been delayed, leading to criticism of a sloppy initial investigation.

Kim Man-bae, the major shareholder of Hwacheon Daeyu Asset Management (Hwacheon Daeyu), a key figure in the Daejang-dong development lobbying and preferential treatment allegations, is leaving Seoul Detention Center in Uiwang, Gyeonggi Province, on the 15th after his arrest warrant was dismissed.
[Image source=Yonhap News]

Yoo Dong-gyu's Arrest Became a Double-Edged Sword

Inside and outside the prosecution, criticism has risen following the court's rejection of Kim's arrest warrant the previous day. In particular, there are criticisms of relying solely on the 'Jung Young-hak recording.' It is argued that prematurely concluding this recording as the smoking gun of the case without verifying its credibility led to the worst outcome of failing to secure the custody of a key suspect.

The basis for the investigation team to request an arrest warrant for Kim was the Jung Young-hak recording. The recording contained a promise from Kim to Yoo Dong-gyu, former Planning Director of Seongnam Urban Development Corporation, in 2015 to give 25% (about 70 billion KRW) of the profits from the Daejang-dong development project. This is the so-called '70 billion KRW agreement theory.' The investigation team considered the 70 billion KRW as a bribe. Additionally, based on materials submitted along with the recording file by accountant Jung Young-hak and testimonies from related parties, the team stated in the arrest warrant that the 500 million KRW Kim gave to Yoo in January this year was a bribe.

Essentially, the same framework was applied as with the arrested Yoo Dong-gyu. Previously, the investigation team also cited the recording to include a 500 million KRW bribery charge in Yoo's arrest warrant. At that time, the result was favorable as the warrant was issued. The investigation team also included an embezzlement charge in Yoo's warrant, which later became the basis for applying a conspiracy embezzlement charge against Kim.

However, this framework ultimately backfired. The previous day, Judge Moon Seong-gwan, head of the arrest warrant division at the Seoul Central District Court, dismissed Kim's arrest warrant, stating that "the necessity for detention is not sufficiently demonstrated." This was a judgment that the credibility of the recording, which was the core evidence and basis for the warrant request, was insufficiently verified. Previously, the investigation team summoned Kim only once despite his claim that the recording was artificially deleted and edited, and then requested the warrant. With conflicting testimonies from related parties and ample room for dispute, the team skipped verification procedures and appealed to the court for the necessity of issuing the warrant.

Yoo Dong-gyu, former Planning Director of Seongnam Urban Development Corporation and a key figure in the 'Daejang-dong Development Project Favoritism' allegations, was taken to Seoul Detention Center by a transport vehicle after undergoing a detention hearing on charges including violation of the Act on the Aggravated Punishment of Specific Economic Crimes (breach of trust) at the Seoul Central District Court in Seocho-gu, Seoul, on the afternoon of the 3rd.
[Image source=Yonhap News]

Criticism of Sloppy Investigation... Atmosphere Calms Down

Inside and outside the prosecution, after Kim's warrant was rejected, there were comments that "the investigation team should have just reviewed the process of Yoo's warrant issuance." It was pointed out that the recording did not have a significant impact on Yoo's warrant issuance. In fact, Judge Lee Dong-hee of the Seoul Central District Court, who reviewed the necessity of Yoo's detention, stated the reason for issuance as "risk of evidence destruction and flight." He did not use the expression "the crime charges are sufficiently demonstrated," which is a key condition for warrant issuance. Attention was paid to Yoo's actions, such as throwing his mobile phone out the window before the search and seizure and refusing to appear before the prosecution, indicating a risk of evidence destruction and flight regardless of the charges.

The investigation team reportedly remained confident about the warrant issuance even after Kim's warrant hearing ended the previous day. Unlike the usual warrant hearings where a considerable amount of materials are brought out using suitcases or wrapping cloths, only file folders were brought to the courtroom. However, with the final rejection of the warrant, the atmosphere within the investigation team reportedly cooled down as if cold water had been poured. Usually, the prosecution issues a statement regardless of the time after the hearing results, but the previous day they postponed it, saying it was "(too) late." The investigation team announced only the next morning that "we will carefully review the reasons for the rejection and decide whether to reapply in the future."