All Four Daejang-dong Figures Indicted... Prosecution Must Handle Both Investigation and Trial (Comprehensive)

Kim Man-bae, Nam Wook, and Jung Young-hak Indicted... Failure to Specify Embezzlement Charges and Exclusion of 5 Billion Club Lobbying Allegations

On the 22nd, Kim Man-bae (left), the major shareholder of Hwacheon Daeyu, who was indicted while in custody, and Nam Wook, the owner of Cheonhwa Dongin No. 4 and a lawyer. /

[Asia Economy Reporters Baek Kyunghwan and Kim Hyungmin] All four key figures involved in the Daejang-dong development preferential treatment allegations have been brought to trial. Following former Seongnam Urban Development Corporation (Seongnam Urban Development Corp.) Planning Director Yoo Dong-gyu, Hwacheon Daeyu major shareholder Kim Man-bae and Cheonhwa Dongin No. 4 owner lawyer Nam Wook were also indicted while in custody. Accountant Jeong Young-hak, who provided the initial recordings at the beginning of the incident, was indicted without detention. Although the embezzlement investigation surrounding the Daejang-dong development has concluded for now, the investigation into higher-ups, including allegations of lobbying in political circles, is just beginning. The prosecution faces the challenge of conducting investigations and trials simultaneously, with attention focused on whether they can secure punishment for the key figures.

According to the legal community on the 22nd, the Daejang-dong Development Allegations Special Investigation Team at the Seoul Central District Prosecutors' Office (Team Leader Kim Tae-hoon, 4th Deputy Chief Prosecutor) indicted Kim and lawyer Nam on the day their detention period expired, charging them with embezzlement under the Act on the Aggravated Punishment of Specific Economic Crimes, along with accountant Jeong.

They are accused of conspiring with former Planning Director Yoo and lawyer Jeong Min-yong, who were previously indicted, to funnel dividend profits worth approximately 65.1 billion KRW to Hwacheon Daeyu and Cheonhwa Dongin Nos. 1 to 7, causing losses to Seongnam Urban Development Corp. The investigation team included in the indictment that Kim, lawyer Nam, and accountant Jeong all unfairly adjusted scoring to ensure Hwacheon Daeyu was selected as the preferred negotiator and negotiated the profit distribution structure through business agreements and shareholder agreements to secure massive development profits.

The embezzlement allegations regarding higher-ups or specific amounts were not concretized this time either. This is because the sales for the Daejang-dong development have not yet been completed, so the profits they obtained have not been calculated. A representative of the investigation team explained, "The currently calculated loss in development profits is 117.6 billion KRW, and considering that the development profits for one block, which was completed for sale at the end of last October, have not yet been identified, we recorded a substantial development profit." The investigation team had previously stated in the indictment of former Planning Director Yoo and the detention warrants for Kim and lawyer Nam that the damage to Seongnam Urban Development Corp. was "at least 65.1 billion KRW."

In particular, Kim is accused of promising a bribe of 70 billion KRW to former Planning Director Yoo in exchange for preferential treatment during the Daejang-dong development process and embezzling 500 million KRW of company funds to actually deliver the bribe. He is also charged with embezzling company funds by falsely registering acquaintances as Hwacheon Daeyu employees and paying 443.5 million KRW in salaries. Lawyer Nam is charged with embezzling 3.5 billion KRW of company funds to give bribes to lawyer Jeong, who worked under former Planning Director Yoo as the head of the strategic investment team.

Accountant Jeong, who helped the investigation by providing recordings at the early stage of the incident, was indicted without detention. This was in consideration of his voluntary appearance at the prosecution early in the investigation and active cooperation in the investigation to uncover the substantive truth, including providing recordings of conversations among related parties. Lawyer Jeong, who was named as an accomplice during the additional indictment of former Planning Director Yoo, had his detention warrant rejected once but will be subject to supplementary investigation.

Lobbying allegations involving the so-called "50 Billion Club" and political circles were omitted from their indictments. On the 17th, the investigation team conducted a search and seizure at the home of former National Assembly member Kwak Sang-do and secured evidence, but analysis is still underway and no summons have been issued. A prosecution official said, "Kim, who is detained, repeatedly refused summons for questioning, causing setbacks in the investigation," and added, "It is also true that physical time was limited due to variables such as COVID-19 infections within the investigation team."

Accordingly, the investigation team plans to first bring the two individuals to trial and then begin full-scale investigations into the "50 Billion Club." Key figures related to lobbying allegations involving Hwacheon Daeyu who have not yet been summoned include former lawmaker Kwak, former Supreme Court Justice Kwon Soon-il, and former special prosecutor Park Young-soo.

The first trial of former Planning Director Yoo, scheduled for the 24th, is also being prepared. Yoo was the first among the key figures in the allegations to be indicted while in custody. He faces charges including bribery under the Act on the Aggravated Punishment of Specific Crimes and embezzlement under the Act on the Aggravated Punishment of Specific Economic Crimes. The investigation team plans to reinforce personnel as needed to maintain the prosecution, considering that any problems in the ongoing investigation after indictment could negatively impact the trial.

However, concerns about the investigation team's inadequate investigation remain. Due to violations of quarantine rules and "split dining" gatherings, COVID-19 infections occurred one after another, damaging the investigation. Holding them accountable, the Seoul Central District Prosecutors' Office dismissed Chief Prosecutor Yoo Kyung-pil on the 19th and appointed Chief Prosecutor Jeong Yong-hwan.

Questions also remain about some omitted investigation details. The investigation team focused solely on accountant Jeong's recordings, summoning and investigating mainly the figures mentioned in the recordings, while skipping investigations of Seongnam city officials directly involved in the Daejang-dong development project at the time of the incident. Only Seongnam City Hall, where related materials are believed to have been organized, was searched and seized, but Gyeonggi Provincial Government, where Lee Jae-myung, the Democratic Party presidential candidate suspected as the highest-level figure, worked until recently, was not examined.

Because of this, calls for the introduction of a special prosecutor are expected to grow louder. The People Power Party has repeatedly demanded the appointment of a special prosecutor, stating that "normal investigation progress is impossible," and candidate Lee also said, "It is desirable for the ruling and opposition parties to agree on a special prosecutor without conditions at any time." Yoon Seok-youl, the People Power Party presidential candidate, has also hinted at accepting a separate special prosecutor investigation for allegations related to the "Daejang-dong special prosecutor" and the "accusation manipulation" case involving himself. A legal community official predicted, "If the prosecution cannot present additional evidence beyond what has already been revealed in court, criticism of the inadequate investigation will increase, and naturally, calls for a special prosecutor will grow louder."

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