[Asia Economy Reporter Choi Seok-jin, Legal Affairs Specialist] The prosecution investigating allegations related to the Wirye New Town development project has additionally indicted five individuals, including former Seongnam Urban Development Corporation Planning Director Yoo Dong-gyu, lawyer Nam Wook, and accountant Jung Young-hak, on charges of violating the Anti-Corruption Act.
The Seoul Central District Prosecutors' Office Anti-Corruption Investigation Division 1 (Chief Prosecutor Eom Hee-jun) on the 26th indicted former Director Yoo, lawyer Nam, and accountant Jung without detention on charges of violating the Anti-Corruption Act. The prosecution also indicted two others, including Jeong Jae-chang, a major shareholder of the private business entity Wirye Asset Management, on the same charges.
This case was investigated by the Seoul Central District Prosecutors' Office Anti-Corruption Investigation Division 3 (Chief Prosecutor Kang Baek-shin), but according to the revised Prosecutors' Office Act's separation of investigation and prosecution regulations, the Anti-Corruption Investigation Division 1 filed the indictment.
According to the prosecution, in July 2013, using internal secrets obtained by former Director Yoo from Seongnam City and Seongnam Urban Development Corporation regarding the project schedule, project feasibility evaluation report, and public offering guidelines of the Wirye New Town A2-8 block development project, the consortium formed by lawyer Nam and accountant Jung, Wirye Asset Management, was selected as the private business operator, and Hoban Construction was selected as the construction company.
Subsequently, from August 2014 to March 2017, as the development project progressed and a total implementation profit of approximately 41.8 billion KRW was generated, the private business operators received dividend gains of about 4.23 billion KRW, and Hoban Construction received dividend gains of about 16.9 billion KRW according to the dividend ratios set in the shareholder agreement.
The Wirye New Town apartment construction project supplied 1,137 households on 64,713㎡ (A2-8 block) in Changgok-dong, Sujeong-gu, Seongnam City. It was led by Seongnam Urban Development Corporation, which established the special purpose company (SPC) 'Pureun Wirye Project' in November 2013, and completed in 2016.
The asset management company of Pureun Wirye Project, 'Wirye Asset Management,' is a grandchild company 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 Director Yoo and real estate specialist lawyer Nam.
Former Director Yoo became involved in the project as Planning Director upon the launch of Seongnam Urban Development Corporation in January 2014, two months after the establishment of Pureun Wirye Project. Lawyer Nam’s wife, Ms. A, served as an inside director but resigned on December 4, 2013.
The prosecution began its first forced investigation starting with a search and seizure of Hoban Construction and others on the 31st of last month and has continued the investigation with additional search and seizures.
A prosecution official stated, "Investigations into other suspects besides the indicted defendants regarding violations of the Anti-Corruption Act and violations of the Act on the Aggravated Punishment of Specific Crimes (bribery) are ongoing."
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