The Board of Audit and Inspection (BAI) will conduct a public audit on the accommodation facility development project at Hapcheon Video Theme Park in Gyeongnam, where a so-called project fund ‘eat-and-run’ incident has emerged.
According to Hapcheon County on the 16th, the BAI is scheduled to carry out an on-site audit of the project from the 18th of this month until mid-next month.
The BAI is reportedly including former and current Hapcheon County heads, responsible public officials, securities firm personnel, and the project company’s CEO as subjects of this audit.
The investigation will focus on ▲the selection process of the private business operator ▲the process of signing the implementation agreement ▲details of investment screening and loan execution ▲background of project cost increases ▲and whether there was collusion between public officials and the project company.
This public audit is based on a public audit request approved by the Hapcheon County Council and is expected to conclude within six months according to relevant regulations.
Hapcheon County plans to resolve various suspicions related to the project, including the so-called 25 billion KRW project fund eat-and-run incident involving the project company’s CEO, with the cooperation of the BAI.
The Hapcheon Video Theme Park accommodation facility development project involves constructing a hotel with 200 rooms and a total area of 7,336㎡ on a 1,607㎡ site within the theme park.
According to the agreement, the project company invested 4 billion KRW, and the remaining 55 billion KRW was borrowed through real estate project financing (PF). However, the project halted after allegations of breach of trust and embezzlement by the project company’s CEO and related parties surfaced.
The county began restoration work to return the site to its original state, including dismantling temporary facilities within the accommodation facility development site, in September and plans to complete it by November. Approximately 430 million KRW will be spent on the restoration.
Earlier, in March this year, Hapcheon County reviewed the project cost increase requested by the project company citing inflation and other reasons, discovered excessive spending by the project company, and found that the CEO, who was unreachable, absconded with 25 billion KRW of project funds.
Accordingly, the county filed charges against five project company officials, including the CEO, for breach of trust, embezzlement, and violations of the Electronic Financial Transactions Act.
After being apprehended by the police, the CEO, the nominal CEO, and the vice president were investigated and found to have withdrawn project funds multiple times to repay personal debts and cover company operating expenses.
The CEO, nominal CEO, and vice president were detained after their arrest, and the second trial for CEO A is scheduled for the 26th, following the first trial in September.
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