Suspicions Over Corporate Card and Seongnam FC Again After a Month
Market Transition Committee Likely to Accelerate Internal Investigation
[Asia Economy Reporter Seongpil Jo] On the 16th, the police conducted a search and seizure at Seongnam City Hall in Gyeonggi Province in connection with the 'Baekhyeon-dong Development Project Allegations.' This indicates that all major cases related to suspicions involving Lee Jae-myung, a member of the Democratic Party of Korea, have effectively entered compulsory investigation.
The Anti-Corruption Economic Crime Investigation Unit of the Southern Gyeonggi Provincial Police Agency dispatched about 10 investigators to Seongnam City Hall from 9 a.m. to carry out the search and seizure. The targets of the search and seizure are known to include departments related to urban planning. The police plan to examine whether Seongnam City violated any laws in connection with the Baekhyeon-dong development project allegations through the materials secured during this operation. The Baekhyeon-dong development project allegations center on the sale of an 111,265㎡ site in Baekhyeon-dong 516, Seongnam, which was changed from natural green space to quasi-residential area with a four-step zoning upgrade after being sold in February 2015 to Asia Developer, a real estate development company that recruited a close aide of then-Mayor Lee. As a result, excessively high apartment retaining walls were constructed, raising safety concerns. Additionally, the number of units initially planned entirely as private rentals was suddenly changed to about 90% general sale housing, reportedly allowing the private developer to earn approximately 300 billion KRW in profits. Seongnam City denies these allegations.
This case originally began in November last year when the People Power Party filed a complaint with the Supreme Prosecutors' Office accusing Lee, who exercised permit authority as the then-mayor of Seongnam, of breach of duty. To avoid duplicate investigations related to this advisory involvement, the prosecution coordinated with the police and transferred the Baekhyeon-dong development project allegations case to the Southern Gyeonggi Provincial Police Agency. This search and seizure took place six months after the police received the case. It is also the first compulsory investigation since Park Ji-young assumed office as the new chief of the Southern Gyeonggi Provincial Police Agency.
Besides this, the police are investigating other allegations that surfaced during the last presidential election in which Lee was named a suspect, including ▲the private misuse of corporate cards by his wife Kim Hye-kyung ▲the secret camp allegations at the Gyeonggi Housing and Urban Corporation (GH) dormitory ▲and the Seongnam FC sponsorship fund allegations. Among these, a compulsory investigation into the GH dormitory secret camp allegations began in April. In the same month, the police conducted a search and seizure at the Gyeonggi Provincial Government regarding Kim’s private misuse allegations, and in the previous month, they searched about 100 corporate card usage locations. The Seongnam Bundang Police Station also conducted searches at Seongnam City Hall and Doosan Construction last month concerning the Seongnam FC sponsorship fund allegations and is currently analyzing the secured materials.
Various allegations related to Seongnam City are also being investigated by the transition committee of Shin Sang-jin, the newly elected mayor from the People Power Party. The committee has requested the submission of 169 documents, including materials related to preferential treatment and corruption allegations during the Democratic Party mayors Lee Jae-myung and Eun Soo-mi’s terms, such as the Daejang-dong, Baekhyeon-dong, and Godeung-dong developments and Seongnam FC sponsorship funds. The Special Committee for Normalizing City Administration has also appointed eight external experts as advisory members, including accountant Kim Kyung-yul, a former member of People’s Solidarity for Participatory Democracy and co-author of the ‘Cho Kuk Black Book.’
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