On the 9th, Jeong Ba-ul, chairman of Asia Developer and a private developer involved in the Baekhyeon-dong development project, who is accused of embezzling and breaching trust of about 48 billion KRW related to the 'Baekhyeon-dong development project preferential treatment suspicion,' appeared before the detention hearing.
The prosecution is conducting an investigation on the grounds that Chairman Jeong lobbied the camp of Lee Jae-myung, then mayor of Seongnam and current leader of the Democratic Party of Korea, to be selected as the project operator.
Jung Ba-ul, chairman of Asia Developer and a private developer involved in the Baekhyeon-dong development project, who is accused of embezzlement and breach of trust amounting to hundreds of billions of won, is heading to the Seoul Central District Court on the morning of the 9th for a pre-arrest detention hearing. [Image source=Yonhap News]
On the morning of the same day, Yoo Chang-hoon, the chief judge in charge of warrants at the Seoul Central District Court, is conducting the pre-arrest suspect interrogation (warrant substantive examination) for Chairman Jeong.
Upon appearing at the court, Chairman Jeong did not respond at all to reporters' questions such as whether he handed over part of the embezzled corporate funds as a bribe to Jeong Jin-sang, former chief of political coordination at the Democratic Party leader’s office (and former Seongnam city policy director). The decision on detention is expected to be made late at night or in the early hours of the 10th.
Chairman Jeong is accused of embezzling about 48 billion KRW by inflating construction costs and service fees from 2013 until last March through three companies: Seongnam R&D PFV, the project implementer of Baekhyeon-dong, and Asia Developer and Younglim General Construction, which he effectively owns. He is also accused of accepting a 200 million KRW 'kickback' from the head of a landscaping company as a bribe (breach of trust for receiving a bribe).
Asia Developer holds a 46% stake in Seongnam R&D PFV as the largest shareholder, and it has been investigated that Seongnam R&D PFV earned about 300 billion KRW in sales profits from the Baekhyeon-dong project, while Asia Developer received about 70 billion KRW in dividend profits.
The prosecution is reportedly considering the possibility that the 7.7 billion KRW, which went to Kim In-seop, former CEO of Korea Housing Technology, as a 'commission for facilitating permits,' may have originated from company funds embezzled by Chairman Jeong. It is expected that the prosecution will conduct additional investigations into breach of trust and violations of the Mountainous Area Management Act, which are the 'mainstream' of the Baekhyeon-dong investigation, by securing Chairman Jeong’s custody.
The preferential treatment suspicion in the Baekhyeon-dong development project concerns the change in development permit conditions for the apartment sales project on the former Korea Food Research Institute site in Baekhyeon-dong, Bundang-gu, Seongnam City, covering 111,265 square meters, which allegedly favored private developers including Chairman Jeong. At that time, Seongnam City permitted a land-use change allowing the construction of a 'retaining wall' apartment about 50 meters high, but according to the Mountainous Area Management Act, when cutting into mountainous terrain to build, the vertical height of the retaining wall should not exceed 15 meters.
The prosecution suspects that former CEO Kim played a key role in the process of changing the permit conditions favorably. The prosecution also believes that Lee Jae-myung and his closest aide, former chief Jeong, received a total of 8.2 billion KRW in money and business rights from Chairman Jeong as a reward for Kim’s facilitation of permits.
After securing Chairman Jeong’s custody, the prosecution is reportedly planning to summon former chief Jeong and others in connection with the Baekhyeon-dong development preferential treatment suspicion.
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