Prosecutors Conduct Consecutive Raids Related to ‘Wirye New Town and Daejang-dong Development’... Over 10 Locations Targeted

[Image source=Yonhap News]

[Asia Economy Reporter Kim Hyung-min] The prosecution, investigating allegations of preferential treatment and lobbying in the Daejang-dong development project along with suspicions surrounding the Wirye New Town development project, is focusing on securing evidence for two consecutive days.

According to the prosecution on the 1st, the Anti-Corruption Investigation Division 3 of the Seoul Central District Prosecutors' Office (Chief Prosecutor Kang Baek-shin) conducted raids at more than 10 locations, including the residences of related parties and financial companies involved in equity investment for the Wirye New Town A2-8 Block development project and project financing (PF) loans related to the Daejang-dong project, on charges of violating the Anti-Corruption Act and bribery under the Special Criminal Act.

This is a large-scale raid conducted for two consecutive days. The prosecution had previously secured materials from about 20 locations the day before, including Hoban Construction, Wirye Asset Management, sales agencies, and residences of related parties in connection with this case.

The Wirye New Town development project is suspected of illegality due to its development method and business structure being similar to the Daejang-dong urban development project. Both projects were carried out through a public-private partnership led by the Seongnam Urban Development Corporation, and in the process, special purpose companies and asset management firms were newly established to lead the projects. Former Planning Director Yoo Dong-gyu of the corporation, lawyer Nam Wook, and accountant Jeong Young-hak, known as the 'Daejang-dong Four,' are reported to have been directly or indirectly involved in the Wirye development project as well.

The prosecution is recently expanding its investigation beyond Daejang-dong to include the Wirye New Town development. Although a dedicated investigation team was formed during the last presidential election phase to probe the Daejang-dong case, it faced criticism for failing to advance the investigation to higher-level officials such as senior Seongnam city officials. After personnel changes following the election, the investigation team was reorganized and has been re-investigating the overall suspicions. While focusing on strengthening charges by reviewing the project from its initial stages, they have also begun uncovering misconduct occurring in other projects with similar structures.

Accordingly, attention is focused on whether the investigation will reach higher-level officials. Since the Wirye New Town development was also carried out while Lee Jae-myung, the new leader of the Democratic Party of Korea, served as mayor of Seongnam, there is speculation that, as in the Daejang-dong project, he will be included in the prosecution’s investigation as the 'final approver.'

Lee is also under investigation for another real estate development project, the Baekhyeon-dong project. Although this case is currently under police investigation, due to its nature as a 'preferential development suspicion,' it shares similarities with the Daejang-dong and Wirye cases, and there is a possibility that the prosecution will conduct investigations into it as well.