Extension Likely for Daejang-dong Completion Approval... "Push for Recovery of Unfair Gains"

Nam Wook, a key figure in the Daejang-dong development lobbying and preferential treatment allegations case, is getting into a vehicle after completing an investigation at the Seoul Central District Prosecutors' Office in Seocho-gu, Seoul, on the afternoon of the 20th.

The city of Seongnam in Gyeonggi Province has decided to postpone the completion approval (construction completion announcement) for the Daejang-dong urban development project scheduled for December. This decision follows Gyeonggi Province's request to freeze and preserve assets of the private developer involved in the Daejang-dong project and to prohibit additional dividends.

According to Seongnam City and the Seongnam City Council on the 21st, the city has solidified its policy to extend the completion approval in accordance with Gyeonggi Province's recommendation to recover unjust profits from the Daejang-dong development project. Completion approval refers to the procedure by which the project implementer who has completed the development obtains final usage approval from the relevant local government. Once completion approval is granted, Seongnam-eu-ttul, the special purpose company (SPC) that carried out the Daejang-dong development, will finalize additional dividend distributions of development profits and proceed with liquidation and dissolution procedures.

Lee Ho-seon, the legal representative of Seongnam citizens who filed a lawsuit to nullify excessive dividends against Seongnam-eu-ttul, stated, "(The Daejang-dong development) reveals multiple issues such as breach of trust and unfair support," adding, "Granting completion approval means the city is endorsing these illegalities, so the SPC should not be allowed to dissolve."

The city council has also consistently advocated for extending the completion approval. Seongnam Urban Development Corporation holds a majority stake in Seongnam-eu-ttul and exerts influence by appointing outside directors. Lee Gi-in, a city council member from the People Power Party, said, "Since Seongnam Urban Development Corporation is subject to council oversight, we can demand disclosure of board meeting minutes through outside directors or request information disclosure," adding, "It is premature to dissolve Seongnam-eu-ttul while suspicions of corruption in Daejang-dong remain unresolved."

However, it is uncertain whether the completion approval can be postponed indefinitely. Without completion approval, preservation registration of the land cannot be made, which may block bank loans, leading to opposition from some residents. Approval is necessary to assign lot numbers and for real estate owners to exercise property rights. A Seongnam city official said, "If completion approval is not granted, residents' exercise of property rights may be restricted," and added, "We are also reviewing measures to address this."

There are also concerns that it may be practically difficult to extend the completion approval indefinitely until unjust profits are recovered. The scale of recovery can be calculated based on legal grounds, but it is hard to predict how long it will take until final judgments are made on various corruption charges such as breach of trust and bribery. Council member Lee said, "It is difficult to identify unjust profits, and even if they are determined, it is questionable how much Seongnam City can recover," adding, "The city council will also discuss related measures."