[Exclusive] Prosecutors Conduct Search and Seizure at Over 20 Locations Including Hoban Construction... Related to Seongnam Urban Development Corporation's 'Wirye New Town' Development Project

[Asia Economy Reporter Choi Seok-jin, Legal Affairs Specialist] The prosecution conducted a search and seizure on the 31st targeting Hoban Construction, the contractor involved in the Wirye New Town development project related to Seongnam Urban Development Corporation.

The Anti-Corruption Investigation Division 3 of the Seoul Central District Prosecutors' Office (Chief Prosecutor Kang Baek-shin) sent prosecutors and investigators to Hoban Construction, the contractor participating in the Wirye New Town development project, and the project implementers for search and seizure operations on the morning of the same day.

A prosecution official stated, "Regarding the 'Wirye New Town development project' carried out by Seongnam Urban Development Corporation since 2013, we are currently conducting search and seizure operations at about 20 locations, including Hoban Construction, the contractor for the A2-8 block development project in Wirye New Town, asset management companies, sales agency companies, and residences of related persons, on charges of violating the Anti-Corruption Act and the Act on the Aggravated Punishment of Specific Crimes (bribery), among others."

The prosecution reportedly launched the search and seizure after detecting criminal suspicions against Hoban Construction during the process of promoting the Wirye New Town development project.

Hoban Construction drew attention when it was revealed that the so-called ‘Daejang-dong team,’ which earned billions of won from the Daejang-dong development project in Seongnam, Gyeonggi Province in 2015, first collaborated on the Wirye New Town development project conducted two years ago with a nearly identical business structure.

The Wirye New Town multi-family housing construction project supplied 1,137 households on 64,713 square meters (A2-8 block) in Changgok-dong, Sujeong-gu, Seongnam City. The special purpose company (SPC) 'Pureun Wirye Project,' established and led by Seongnam Urban Development Corporation in November 2013, implemented the project and completed it in 2016.

‘Wirye Asset Management,’ the asset management company of Pureun Wirye Project, is a subsidiary wholly owned by TS Housing, which is 100% owned by Hoban Construction.

Similar to 'Hwacheon Daeyu Asset Management' in the Daejang-dong development project, 'Wirye Asset Management' was responsible for asset management related to the project, with involvement from former Seongnam Urban Development Corporation Planning Director Yoo Dong-gyu and real estate specialist lawyer Nam Wook.

After the establishment of Pureun Wirye Project, former Director Yoo took charge as Planning Director upon the launch of Seongnam Urban Development Corporation in January 2014, two months later, and was involved in this project. Lawyer Nam’s wife, Ms. A, served as an inside director but resigned on December 4, 2013.

The Wirye New Town project was a key business for the Hoban Construction chairman’s family-affiliated company. The prosecution has been expanding its investigation into the overall Wirye New Town project.

Meanwhile, the Fair Trade Commission’s complaint led to an investigation by the Fair Trade Investigation Division of the Seoul Central District Prosecutors' Office (Chief Prosecutor Lee Jeong-seop), which recently filed a summary indictment against former Hoban Construction Chairman Kim Sang-yeol for violating the Fair Trade Act (failure to submit designated data on large business groups).