'Kim Seong-tae Geumgojigi', Imprisonment Decision Today... Will Prosecution's Ssangbangwool Investigation Gain Momentum?

[Asia Economy Reporter Kim Hyung-min] The decision on whether to detain Kim Mo, the former head of the Finance and Management Headquarters of Ssangbangwool Group and known as the "treasurer" of former Ssangbangwool Group Chairman Kim Sung-tae, will be made on the 13th.

The Suwon District Court will hold a detention hearing (warrant review) for Kim at 2:30 p.m. on the same day to examine the necessity of detention. Earlier, the Suwon District Prosecutors' Office Criminal Division 6 (Chief Prosecutor Kim Young-nam) filed a detention warrant with the court for Kim on charges including violation of the Foreign Exchange Transactions Act, fraudulent unfair trading violating the Capital Markets Act, embezzlement of company funds, and breach of trust for unfair support to an unlisted company.

[Image source=Yonhap News]

If Kim is detained, the prosecution's investigation into Ssangbangwool Group is expected to gain momentum. The prosecution is examining the suspicious flow of funds throughout Ssangbangwool Group, focusing especially on allegations of "fund transfers to North Korea" and "lawyer fee payments on behalf."

Kim is a key figure who has a thorough understanding of the fund flows within Ssangbangwool Group and is regarded as the "key man" in these allegations. He worked as the head of the Finance and Management Headquarters at Ssangbangwool Group for over 10 years. He is also the brother-in-law of former Chairman Kim. The prosecution believes he was deeply involved in the process of transferring funds to North Korea. Kim is suspected of being involved in procuring funds for two paper companies (SPCs) established by former Chairman Kim to cover the costs of the North Korea remittances. Additionally, it is known that part of the $8 million transferred to North Korea by former Chairman Kim in 2019 (including $5 million for the North Korean smart farm project and $3 million for the Gyeonggi Province governor's visit to North Korea) was arranged by Kim.

When the prosecution's investigation into Ssangbangwool intensified last year, Kim fled abroad but was arrested in early December last year in Thailand. After refusing repatriation to Korea and engaging in litigation locally, he was fined 4,000 baht (approximately 150,000 KRW) on December 7 by a local court for illegal stay charges and subsequently expressed his intention to voluntarily return. Kim was brought back to Korea on the 11th.

The prosecution reportedly conducted intensive questioning of Kim over the past weekend. After detention, they are expected to probe more detailed information. The prosecution aims to clarify the source, additional transfers, and purpose of the $8 million that former Chairman Kim reportedly sent to North Korea through Kim. They are also expected to question the relationship between Lee Jae-myung, leader of the Democratic Party of Korea, and former Chairman Kim. Former Chairman Kim testified to the prosecution that he had a phone conversation with Lee Jae-myung, then governor of Gyeonggi Province, through Lee Hwa-young, former Deputy Governor for Peace of Gyeonggi Province, who was a channel for inter-Korean business. Both Lee Hwa-young and Lee Jae-myung have strongly denied this. Attention is also focused on whether the "lawyer fee payment on behalf" allegation, which claims that Ssangbangwool Group paid 2.3 billion KRW in legal fees to lawyer Lee Tae-hyung, who defended Lee Jae-myung in a public official election law violation case, will be revealed through Kim.