Seongnam Urban Development Corporation Files Compensation Lawsuit Against Representative Lee Jae-myung and Four Others Over 'Daejang-dong Allegations'

Seongnam Urban Development Corporation has filed a lawsuit seeking damages against Lee Jae-myung, leader of the Democratic Party of Korea, and others in connection with allegations of preferential treatment in the Daejang-dong development project.

Seongnam Urban Development Corporation. Yonhap News Agency

Seongnam Urban Development Corporation announced on the 4th that it filed a lawsuit on the 10th of last month at the Suwon District Court, claiming damages worth approximately 510 million KRW against five individuals related to the Daejang-dong development project: Lee Jae-myung (then mayor of Seongnam), Jeong Jin-sang, former policy director of Seongnam City, Yoo Dong-gyu, former head of Seongnam Urban Development Corporation, accountant Jeong Young-hak, and lawyer Jeong Min-yong.

The claimed amount is only a portion of the total damages to avoid excessive litigation costs. The corporation stated that it plans to expand the amount depending on the outcome of the criminal trial and thus filed the lawsuit.

Previously, Seongnam Urban Development Corporation had filed a civil lawsuit against Kim Man-bae and Nam Wook, major shareholders of Hwacheon Daeyu, in 2022.

The Daejang-dong development project preferential treatment case involves allegations that officials related to Seongnam City's urban development project colluded with private contractors to design a business structure favorable to the private contractors, resulting in the corporation receiving only a fixed profit of 183 billion KRW, which is below the appropriate dividend profit it should have received, causing damages of 489.5 billion KRW to the corporation. The criminal trial is currently ongoing.

Seongnam Urban Development Corporation stated, “We initially planned to take action based on the results of the criminal trial, but due to the prolonged criminal proceedings, there were concerns about the expiration of the statute of limitations for claims for damages caused by illegal acts of the related parties, leading to the filing of this lawsuit.”