MBK Case Reassigned, Wirye Appeal Dropped...Prosecution Shifts Stance After Mid-Level Reshuffle

MBK case separated from original team
for a "fundamental re-examination"
Appeal abandoned in Wirye case as well
Shift in stance in line with prosecution reform

The prosecution is showing a shift in its investigative stance following recent appointments of mid-level officials, such as reassigning the MBK Partners·Homeplus case and deciding not to appeal the Wirye New Town development corruption case. Analysts say this is an unusual move that aligns with the current administration's prosecutorial reform direction of separating investigation and indictment.

According to the legal community on February 5, the previous day the Seoul Central District Prosecutors' Office announced that it had reassigned the MBK Homeplus case from the Anti-Corruption Investigation Division 3 to the Anti-Corruption Investigation Division 2, headed by Senior Prosecutor Lee Sanghyeok. The prosecution explained, "This is a measure to allow a new division, rather than the division that initiated and conducted the investigation, to make a judgment from an objective perspective," adding, "In reflective consideration of a series of acquittals in direct investigation cases, it is intended to give substantive effect to Article 4(2) of the Public Prosecutors' Office Act, which embodies the purpose of separating investigation and indictment."

The prosecution began its investigation in April last year and last month requested arrest warrants for four key suspects, including MBK Chairman Kim Byungju, but the court rejected all of them on the grounds of "insufficient prima facie evidence." The Anti-Corruption Division 3 reportedly reported a plan to indict on February 3, but the leadership did not approve it and instead decided on reassignment. In effect, the leadership, concerned about confirmation bias on the part of the existing investigation team, ordered a fundamental re-examination under a "red team" concept.

A lawyer who previously served as a senior prosecutor said, "I worked as a prosecutor for more than 20 years, but I do not recall seeing a case being reassigned for this kind of reason," adding, "It appears to be a measure based on the judgment that the investigation team became too immersed in the case and lost its objectivity." Some observers predict that this reassignment will ultimately lead to a decision not to indict after supplementary investigation. A prosecution official said, "We will reopen everything, including whether to indict and the scope of any supplementary investigation, and review the case again."

On the same day, the prosecution also decided not to appeal in the Wirye New Town development corruption case. After the first-instance court acquitted all private business operators, including former Seongnam Development Corporation Director Yoo Donggyu, the prosecution announced in the afternoon of the last day of the appeal period, "In light of the legal review and the likelihood of an appeal being granted, we have decided not to appeal." Last year, in the Daejang-dong case as well, the prosecution abandoned an appeal regarding the acquittal on breach of trust charges, saying that "there is no practical benefit." These measures, taken immediately after the personnel reshuffle, are seen as reflecting the leadership's intention to put the brakes on the investigation teams' practice of pushing ahead with aggressive indictments.