Prosecutors Conduct Search and Seizure at Baekhyeon-dong Private Contractor... Suspected Embezzlement and Breach of Trust Involving Hundreds of Billions (Comprehensive)

The prosecution investigating the 'special favors and corruption suspicions in the Baekhyeon-dong development project' has detected signs that a private contractor involved in the project embezzled and breached trust with company funds amounting to hundreds of billions of won, and has launched a forced investigation.

Seoul Seocho-gu Seoul Central District Prosecutors' Office. / Photo by Jinhyung Kang aymsdream@

According to the legal community on the 17th, the Anti-Corruption Investigation Division 1 of the Seoul Central District Prosecutors' Office (Chief Prosecutor Eom Hee-jun) dispatched prosecutors and investigators to about 10 locations, including the residence of Chairman Jeong of the real estate development company Asia Developer and the offices of service providers, from the morning to secure related materials.

Asia Developer is the largest shareholder holding 46% of the shares in Seongnam R&D PFV, the project operator of Baekhyeon-dong. The prosecution believes that Chairman Jeong embezzled part of the Baekhyeon-dong development profits he received as dividends through Seongnam R&D PFV and caused damage to the company by inflating expenses. It is estimated that the amount of embezzlement and breach of trust by Chairman Jeong reaches hundreds of billions of won.

The prosecution detected these circumstances while tracing the flow of funds such as development profits during the investigation into suspicions of collusion between the private contractor and Seongnam City regarding special favors in the Baekhyeon-dong development.

The Baekhyeon-dong development project involved building apartments on the former site of the Korea Food Research Institute in Baekhyeon-dong, Bundang-gu, Seongnam City. The prosecution believes that 'lobbyist for government relations' Kim In-seop played a role in the process where various permits and approvals for the Baekhyeon-dong development were changed to favor Chairman Jeong and other private contractors, and on the 2nd, Kim was arrested and indicted on charges including bribery under the Act on the Aggravated Punishment of Specific Crimes.

Kim is suspected of receiving a total of 8.2 billion won in money and business rights from Chairman Jeong as a reward for facilitating permits and approvals by leveraging his connections with Lee Jae-myung, the leader of the Democratic Party and then mayor of Seongnam City, and Lee’s close aide Jeong Jin-sang. As a result of the Baekhyeon-dong project, Seongnam R&D PFV earned sales profits in the range of 300 billion won, and Asia Developer obtained dividend profits of about 70 billion won, according to investigations.

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