Police Form Separate Dedicated Investigation Team, Proceeding 'Straight Ahead' in Hwacheondaeyu Investigation for Now

Gyeonggi Nambu Police Agency Forms 38-Member Task Force
Focus on Uncovering Suspicious Fund Flows of Hwacheon Daeyu
Prosecutors Conduct Search and Seizure, Expected to Secure Key Evidence
Calls for Coordination and Cooperation on Investigation Scope Raised

[Image source=Yonhap News]

[Asia Economy Reporter Lee Gwan-joo] Amid the prosecution's large-scale raids related to the preferential treatment allegations in the Daejang-dong development project in Seongnam, Gyeonggi Province, the police, who have launched a separate investigation, are also stepping up their efforts by forming a dedicated investigation team. However, since the prosecution is believed to have already secured key evidence, future cooperation between the prosecution and police is expected to be crucial.

According to the police on the 30th, the Gyeonggi Southern Provincial Police Agency formed a dedicated investigation team of 38 members, led by the head of the Anti-Corruption Economic Crime Investigation Unit, and began a full-scale investigation into suspicions related to Hwacheon Daeyu Asset Management (Hwacheon Daeyu) the day before. The investigation team includes 27 members from the Anti-Corruption Investigation Unit, 7 investigators from the Intelligence Team of Yongsan Police Station in Seoul who had been conducting pre-indictment investigations, and 4 members from the Crime Proceeds Tracking Team of the Seoul Metropolitan Police Agency.

The police currently believe that their investigation scope does not overlap with that of the prosecution. The main focus of the police investigation is on allegations of embezzlement and breach of trust related to Hwacheon Daeyu. Earlier in April, the police were notified by the Financial Intelligence Unit (FIU) of the Financial Services Commission about suspicious fund flows between Kim Man-bae, the major shareholder of Hwacheon Daeyu, and Lee Seong-moon, the CEO of Hwacheon Daeyu. The Yongsan Police Station has been verifying the circumstances and usage of 47.3 billion KRW borrowed by Kim from Hwacheon Daeyu under the name of long-term loans until last year. In this regard, the Yongsan Police Station summoned Kim as a witness on the 28th and questioned him for about 12 hours, and also conducted one witness interrogation of CEO Lee. The police have previously stated that their investigation direction is unrelated to preferential treatment controversies.

However, as the Committee for Measures for the Common People reported the Daejang-dong development preferential treatment allegations and the case of former lawmaker Kwak Sang-do’s son receiving 5 billion KRW in retirement pay from Hwacheon Daeyu to the police, the possibility of overlap with the prosecution’s investigation has increased. A National Police Agency (NPA) official said, “At present, we believe there is no overlap in the investigation scope with the prosecution,” but added, “There may be overlapping issues as the investigation progresses.” Accordingly, if charges become more specific during the investigation, coordination with the prosecution regarding the investigation scope will be necessary.

Currently, the prevailing view is that the prosecution holds the reins of the Hwacheon Daeyu-related investigation. The prosecution conducted raids on the residences of key figures, including Hwacheon Daeyu, Seongnam Urban Development Corporation, and the company of lawyer Nam Wook, known as the actual owner of Cheonhwa-dongin No. 4, the day before. Although the police may obtain and execute additional search warrants in the future, it is expected that the prosecution has already taken a significant amount of materials necessary to prove the charges. An NPA official stated, “If necessary, we plan to cooperate with the prosecution in the investigation.”

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