The prosecution investigating allegations of corruption in the development of Wirye New Town and Daejang-dong conducted a search and seizure on the morning of the 7th at more than 40 locations, including Seongnam City Hall in Gyeonggi Province, Seongnam Urban Development Corporation, and the real estate development company Asia Developer, in connection with the special favor allegations related to the Baekhyeon-dong development.Photo by Yonhap News Agency shows prosecution officials entering the Urban Development Department of Seongnam City Hall for the search and seizure.
[Asia Economy Reporter Kim Hyung-min] The prosecution investigating the development corruption allegations in Wirye and Daejang-dong has also launched a full-scale investigation into the 'Baekhyeon-dong development preferential treatment allegations.'
The Anti-Corruption Investigation Division 1 of the Seoul Central District Prosecutors' Office (Chief Prosecutor Eom Hee-jun) sent prosecutors and investigators to over 40 locations, including Seongnam City Hall, Seongnam Urban Development Corporation, and the real estate development company Asia Developer, on the morning of the 7th to secure related materials. The search and seizure locations also included the residences of Kim In-seop, former CEO of Korea Housing Technology and known as a close aide to Lee Jae-myung, the leader of the Democratic Party of Korea, and Jeong Mo, CEO of Asia Developer.
The Baekhyeon-dong allegations center on the claim that Asia Developer received preferential treatment by having the land use zoning upgraded by four levels at once in 2015 (from natural green space to quasi-residential). The Baekhyeon-dong development project involved building apartments on the 111,265㎡ site of the former Korea Food Research Institute in Baekhyeon-dong, Bundang-gu, Seongnam City, which had been relocated to a provincial area. The project consists of 15 buildings with 1,233 households, with move-ins starting in June 2021. After the site was sold to Asia Developer and others in 2015, when Lee Jae-myung was mayor of Seongnam, the land use was changed by four levels all at once.
At that time, Asia Developer recruited Kim In-seop, a former CEO known as a close aide to Lee. Suspicions arose that he lobbied the Seongnam City authorities to achieve the drastic land use change. It was also revealed that Jeong Jin-sang, former Political Coordination Officer in Lee’s office and Lee’s closest aide, and former CEO Kim had a total of 115 phone calls between April 2014 and March 2015 while the Baekhyeon-dong development project was underway.
The original plan to build all private rental housing was also changed, and in November 2015, the private rental housing was reduced to 123 units, which is 10% of the total households, while the number of sale units increased significantly to 1,110 units, leading to further preferential treatment controversies. It is known that the private developer earned about 300 billion KRW in profits through this.
The Gyeonggi Southern Provincial Police Agency, which investigated the case, concluded that former CEO Kim was involved in the process and sent the case to the Seongnam branch of the Suwon District Prosecutors' Office on charges of bribery under the Act on the Aggravated Punishment of Specific Crimes. Subsequently, the Seongnam branch transferred the case to the Seoul Central District Prosecutors' Office, judging that the nature of the case was similar to the Daejang-dong corruption allegations. Currently, a total of 10 people have been booked in connection with this case, including Lee Jae-myung, former Political Coordination Officer Jeong, former Planning Director Yoo Dong-gyu of Seongnam Urban Development Corporation, and three Seongnam city officials involved in the project.
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