[Daechang-dong Investigation Fallout] Kim Man-bae's Warrant Dismissed... Yoo Dong-gyu's Arrest Became a Liability

[Asia Economy Reporter Seongpil Cho] The arrest warrant for Kim Man-bae, the major shareholder of Hwacheon Daeyu Asset Management (Hwacheon Daeyu), was dismissed on the 14th, sparking controversy over a sloppy investigation both inside and outside the prosecution. In particular, there is growing criticism that the investigation relied solely on the 'Jung Young-hak recording.' It is said that without undergoing a credibility verification process, hastily concluding this recording as the smoking gun of the case led to the worst outcome of failing to secure the custody of the key suspect.

◆ The same frame as Yoo Dong-gyu... turning into a fatal mistake = According to a comprehensive report by Asia Economy, the basis for the Seoul Central District Prosecutors' Office's dedicated investigation team (led by Deputy Chief Prosecutor Kim Tae-hoon) to request an arrest warrant for Kim, the key suspect in the Daejang-dong development preferential treatment and lobbying allegations case, was the Jung Young-hak recording. The recording contained a promise by Kim in 2015 to Yoo Dong-gyu, former Planning Director of Seongnam Urban Development Corporation, to give 25% (about 70 billion KRW) of the Daejang-dong development profits. This is the so-called '70 billion KRW agreement theory.'

The investigation team judged the 70 billion KRW as a bribe. Additionally, based on materials submitted along with the recording file by accountant Jung Young-hak and testimonies from related parties, the team stated in the arrest warrant that the 500 million KRW Kim gave to former Director Yoo in January this year was a bribe. Including the 5 billion KRW paid to Byung-chae, son of Assemblyman Kwak Sang-do, former Blue House Civil Affairs Secretary, as severance pay, a total of 75.5 billion KRW in bribery charges were applied. Essentially, the same frame applied to Yoo, who was already detained. Earlier, the investigation team also included a 500 million KRW bribery charge in Yoo’s arrest warrant based on the recording. At that time, the result was favorable. The warrant was issued. The team also included breach of trust charges in Yoo’s warrant, which became a basis for applying breach of trust charges to Kim through conspiracy.

However, this frame ultimately backfired. The day before, Judge Moon Seong-gwan, in charge of arrest warrants at the Seoul Central District Court, dismissed Kim’s warrant, stating that "it is difficult to see that the necessity for detention has been sufficiently demonstrated." This meant that the credibility of the recording, which was the basis and key evidence for the warrant request, was judged to have been insufficiently verified. Previously, the investigation team summoned Kim only once despite his claim that the recording had been artificially deleted and edited, and then requested the warrant. With conflicting testimonies from related parties and ample room for dispute, the team skipped the verification process and appealed to the court for the necessity of issuing the warrant.

Kim Man-bae, the major shareholder of Hwacheon Daeyu Asset Management (Hwacheon Daeyu), a key figure in the Daejang-dong development lobbying and preferential treatment allegations, is leaving Seoul Detention Center in Uiwang, Gyeonggi Province, on the 15th after his arrest warrant was dismissed.
[Image source=Yonhap News]

◆ Sloppy investigation... the mood dampened = Inside and outside the prosecution, after Kim’s warrant was dismissed, there were criticisms that "the investigation team should have just reconsidered the process of Yoo’s warrant issuance." It was said that the recording did not have a major influence on Yoo’s warrant issuance. In fact, Judge Lee Dong-hee, who reviewed Yoo’s detention necessity at the Seoul Central District Court, stated the reason for issuance was "risk of evidence destruction and flight." He did not use the phrase "the crime charges have been proven," which is a core condition for issuing a warrant. Attention was paid to Yoo’s actions unrelated to charges, such as throwing his phone out the window before a search and refusing to appear before the prosecution, showing potential for evidence destruction and flight.

It is said that even after Kim’s warrant hearing ended the day before, the investigation team was confident about the warrant issuance. Unlike the usual warrant hearings where a considerable amount of materials are brought out using suitcases or cloth bundles, only a file folder was brought to the courtroom. However, with the final dismissal of the warrant, the atmosphere within the investigation team reportedly cooled down as if cold water had been poured. The prosecution usually issues a statement regardless of time once the hearing results are out, but on that day, they postponed it saying it was "(too) late." The investigation team announced only the next morning that "we will carefully review the reasons for dismissal and decide whether to reapply in the future."

This content was produced with the assistance of AI translation services.