Second Extreme Choice by 'Daejang-dong Development Project' Staff... Red Light for Investigation into 'Higher-Ups'

Deceased Kim Moon-gi, Head of Development Division 1 at Seongnam City Development Corporation... Involved in Daejang-dong Project Contractor Selection and Deletion of Excess Profit Recovery Clause

The Seoul Central District Prosecutors' Office building in Seocho-dong, Seoul, where the dedicated investigation team for the Daejang-dong development lobbying and preferential treatment allegations has been formed. / Photo by Choi Seok-jin

[Asia Economy Reporter Choi Seok-jin, Legal Affairs Specialist] The prosecution’s investigation into the ‘upper echelon’ of the Daejang-dong development project’s preferential treatment allegations has hit a red light following a series of extreme choices by key officials of Seongnam Urban Development Corporation (hereafter, the Corporation), who were in charge of the project’s practical operations.

With the prosecution showing little determination to investigate the involvement of Lee Jae-myung, the Democratic Party presidential candidate and former mayor of Seongnam, and with major suspects and witnesses holding the key to clarifying the involvement of Seongnam City or the Corporation taking their own lives, there is speculation that the ‘upper echelon’ investigation is effectively dead in the water.

On the 22nd, the Bundang Police Station in Gyeonggi Province announced that it plans to conduct an autopsy to determine the exact cause of death of Kim Moon-gi, head of the Corporation’s Development Division 1, who was found dead in his office the previous day.

Kim, who was the team leader of Development Project Team 1 during the 2015 Daejang-dong development project, took over the project from Development Project Team 2, which had been the main department managing the project, under the instructions of former Corporation Planning Headquarters Director Yoo Dong-gyu (currently detained).

He is suspected of having participated as a judge in both the first and second evaluations when ‘Seongnam’s Garden,’ which includes Hwacheon Daeyu, was selected as the private developer for the Daejang-dong project, along with lawyer Jeong Min-yong (former head of the Corporation’s Strategic Business Office), who was indicted the day before. He also handled the practical work of the business agreement that determined the dividend rates of the Daejang-dong development profits with Jeong, and is suspected of being involved in the process where the clause for recovering excess profits was deleted. Notably, he had ties with former Director Yoo even before joining the Corporation and was considered a close aide.

Although Kim appeared at key points throughout the Daejang-dong development project, the prosecution only questioned him several times as a witness and had not initiated any compulsory investigation.

A prosecution official said, “Kim was questioned as a witness and there were no plans to change his status to a suspect.” This implies that no particular charges had been found so far.

Therefore, various interpretations are emerging regarding the background of Kim’s extreme choice.

Kim’s elder brother said that Kim called his youngest brother the previous afternoon and said, “The company is harassing me by suing me,” adding, “It seems they tried to shift the responsibility onto my brother. They are trying to cut off the tail while leaving the main body untouched.”

In fact, the Corporation conducted an internal audit related to lawyer Jeong, who had resigned from the Corporation on September 25 and was a civilian at the time he visited the Corporation and was allowed to view confidential documents such as the evaluation score sheet for the Daejang-dong private developer. Following this, the Corporation notified Kim of a decision for severe disciplinary action and reportedly considered criminal charges.

In this context, opposition party members of the Seongnam City Council raised suspicions of ‘collusion’ or ‘evidence tampering’ between the two. Testimonies have also emerged that Kim was under considerable stress as the Corporation’s disciplinary procedures proceeded alongside the prosecution’s investigation.

Kim was found dead only 11 days after Yoo Han-gi, former head of the Corporation’s Development Business Headquarters and Kim’s direct superior, took his own life, making it inevitable that the prosecution’s ‘upper echelon’ investigation would be further weakened. The ‘key men’ necessary to clarify what role the Corporation or Seongnam City played in the process where developers pocketed astronomical profits, and who was behind the instructions, have disappeared.

After Yoo’s death, the prosecution, which had been taking a breather for a while, was expected to resume investigations into high-ranking Seongnam City officials involved in project approval lines soon. However, due to the unexpected variables, the ‘upper echelon’ investigation is expected to be effectively stalled.

The prosecution is conducting supplementary investigations into former lawmaker Kwak Sang-do, whose arrest warrant was rejected once, and is considering reapplying for the warrant. However, investigations into the ‘50 Billion Club’ and related ‘lobbying’ have shown little progress.

Meanwhile, the prosecution indicted lawyer Jeong the previous day without detention on charges including breach of trust under the Specific Economic Crimes Act, bribery after the fact, and violations of the Act on the Regulation and Punishment of Criminal Proceeds Concealment.

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