Seongnam City Pursues Full Recovery of 82.8 Billion Won from Daejang-dong Group... Provisional Seizure of Hwacheon Daeyu Trust Account

Mayor Shin Sangjin Urges Prosecution to Take Responsibility in Recovering Criminal Proceeds

Beyond "Empty Accounts": All-Out Effort to Recover Daejang-dong Assets Including Real Estate and Securities

Ten Additional Preservation Measures This Year... Ongoing Civil Asset Recovery Lawsuits

Seongnam City in Gyeonggi Province (Mayor Shin Sangjin) has launched an all-out "asset tracing campaign" to recover criminal proceeds from private operators involved in the Daejang-dong development project. The city is expanding civil preservation measures such as provisional seizures and injunctions, while strongly urging the prosecution to actively cooperate with the investigation.

Seongnam City Hall exterior view. Courtesy of Seongnam City

According to Seongnam City on March 11, it has not ceased efforts to recover assets even after discovering so-called "empty accounts" among some deposit claims belonging to the Daejang-dong group. The city continues to broaden the scope of its tracing targets to include real estate, securities, jeonse deposits, commercial property rental income, and trust accounts for apartment sales proceeds, and is continuously taking additional preservation measures.

This year alone, Seongnam City has applied for a total of 10 additional provisional seizures and injunctions and has received approval from the court on all of them. These include three real estate assets linked to Jeong Younghak, two claims related to Kim Manbae, and five real estate and claim assets related to Nam Wook.

The core of these latest measures is, in particular, the provisional seizure of the "claim for the payment of Hana Asset Trust's apartment sales proceeds" of Hwacheon Daeyu Asset Management, which is effectively controlled by Kim Manbae. Based on the prosecution's investigative report, the city anticipates that approximately 82.8 billion won in unsettled apartment sales proceeds will be deposited into the trust account, and has preemptively frozen these funds. Currently, the city is precisely verifying the remaining amount of the claim through third-party debtor statements.

Along with asset freezing, the lawsuit seeking to confirm the invalidity of dividend resolutions is also gaining momentum. At the first hearing held at the Seongnam branch of Suwon District Court on March 10, representatives of Seongnam Urban Development Corporation strongly argued that dividends of around 400 billion won paid by Seongnam's Tteul to private operators from 2019 to 2021 were invalid, citing violations of the articles of association and the Commercial Act.

The court has determined that the outcome of the second trial in the Daejang-dong criminal case will become an important standard for judgment in the civil lawsuit, and has scheduled the next hearing for April 21.

The upcoming first formal appellate hearing of the Daejang-dong criminal case at the Seoul High Court on March 13 is seen as a critical turning point for the recovery of criminal proceeds. Seongnam City expressed deep concern over the prosecution's passive attitude at the preparatory hearing in January, when prosecutors replied "no comment" to the court's questions.

Shin Sangjin, Mayor of Seongnam City, stated, "The prosecution must not display another irresponsible attitude, as it did when it abandoned the appeal last year," emphasizing, "The prosecution, more than anyone else, must treat the substance of the criminal proceeds and the necessity for recovery with utmost seriousness and must take responsibility for maintaining the indictment this time."

Seongnam City believes that a thorough review in the criminal appellate trial could have a significant impact on the city's various civil asset recovery procedures. In particular, the city maintains that if private operators challenge the nature of the criminal proceeds or the structure of the breach of trust during the criminal trial, the civil lawsuit will inevitably have to closely monitor these developments. Therefore, the prosecution should no longer maintain a passive stance.

A Seongnam City official said, "We are closely monitoring and waiting for Hana Asset Trust's response, as it will become an important basis for subsequent measures."

Shin Sangjin, Mayor of Seongnam City, reiterated, "The prosecution must not show irresponsible behavior, as it did when it abandoned the appeal last year and at the recent preparatory hearing," and emphasized, "The prosecution, more than anyone else, must treat the substance of the Daejang-dong criminal proceeds and the necessity for recovery with utmost seriousness, and this time must take responsibility in maintaining the indictment."

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