Prosecutors Investigate Bukuk Securities Executive Invested in 'Wirye New Town Development'

[Image source=Yonhap News]

[Asia Economy Reporter Kim Hyung-min] The prosecution investigating the 'special favor allegations in the development of Wirye New Town' is summoning and questioning a securities firm official who participated as an investor in the project.

According to the legal community on the 13th, the Anti-Corruption Investigation Division 3 of the Seoul Central District Prosecutors' Office (Chief Prosecutor Kang Baek-shin) is currently investigating Mr. A, an executive of Buguk Securities.

The prosecution is verifying with Mr. A the circumstances under which he received shares from Mirae Asset Securities to participate in the project and the reasons for investing funds in a project with a 0% dividend share ratio.

Buguk Securities held a 19.4% stake in Pureun Wirye Project, the project finance vehicle (PFV) for the development of Wirye New Town A2-8 block. In November 2013, the Mirae Asset Securities consortium, selected as the private developer, established Pureun Wirye Project in the same month and began actively promoting the redevelopment project. Mirae Asset Securities later transferred 19.4% of its stake in Pureun Wirye Project to Buguk Securities. The major shareholder Mirae Asset Securities' stake decreased to 2.5%, effectively making Buguk Securities the consortium's representative.

Other shareholders of Pureun Wirye Project included Wirye Asset Management (13.5%), Meritz Comprehensive Financial Securities (14.9%), IBK Investment & Securities (14.9%), Eugene Investment & Securities (14.9%), and SK Securities (14.9%). Seongnam Urban Development Corporation also held a 5% stake.

Although Buguk Securities had the highest shareholding, it reportedly did not receive dividends from the Wirye New Town development project. The dividend share ratio was 50% for Seongnam Urban Development Corporation and 10% each for the other shareholders excluding Buguk Securities and Mirae Asset Securities, totaling 50%.

The prosecution, which had been investigating lobbying and special favor allegations surrounding the Daejang-dong development, recently expanded the scope of its investigation by conducting large-scale raids on construction companies and securities firms including Buguk Securities involved in the Wirye project.