The prosecution, which is investigating the ‘suspicion of preferential treatment for the Baekhyeon-dong development project’, summoned Paul Jeong, CEO of Asia Developer, a key private developer of the project. It has been 13 days since the search and seizure of CEO Chung. As soon as the summons and investigation of the key suspects, Seongnam City and Seongnam Urban Development Corporation (Seongnam Provincial Government) officials, are completed, the investigation team’s blade is expected to turn to Jeong Jin-sang, former head of the Democratic Party’s representative office, and Lee Jae-myung, the Democratic Party’s representative.
According to the legal community on the 30th, the Seoul Central District Prosecutor’s Office’s Anti-Corruption Investigation Division 1 (Chief Prosecutor Eom Hee-joon) is investigating Jeong as a suspect on the morning of the 30th. On the 17th, the prosecution conducted a search and seizure of about 10 places, including the residence of CEO Chung and the offices of related companies, in connection with charges such as breach of trust and embezzlement.
Prosecutors are said to have questioned Jung about how the Baekhyeon-dong development project was approved after recruiting former Korea Housing Technology CEO Kim In-seop (detained), known as a “government lobbyist.”
The Baekhyun-dong suspicion is that when Asia Developer developed an apartment on the site of the Korea Food Research Institute located in Baekhyun-dong in 2015, after recruiting former CEO Kim, the use of the site was raised by 4 steps (natural green area → semi-residential area) and received preferential treatment.
Asia Developer is the largest shareholder with a 46% stake in Seongnam R&D PFV, the developer of the Baekhyun-dong project. As a result of the Baekhyun-dong project, it is reported that Seongnam R&D PFV earned a pre-sale profit of about 300 billion won, and Asia Developer a dividend profit of about 70 billion won.
Prosecutors believe that Jeong recruited former CEO Kim to lobby for Seongnam city officials, including then-policy secretary Jeong Jin-sang, and gave him 7.7 billion won in cash and 500 million won worth of Hamba restaurant business rights (mediation).
Along with this, it is believed that CEO Jeong caused the same amount of damage to Seongnam-si and Seongnam-do opening by making the developer gain tens of billions of won by excluding Seongnam-do opening from the Baekhyeon-dong project.
From 2016 to last year, there are also suspicions that CEO Jeong caused tens of billions of won in damages to Seongnam R&D PFV (embezzlement and breach of trust) by overestimating the expenses to be paid to affiliates while handling the affairs of the developer.
In addition, the investigation team is also trying to figure out how 4.6 billion won in funds from Seongnam R&D PFV, the developer of the Baekhyeon-dong project, was transferred to Company A, a multicultural family support non-profit corporation run by Chairman Chung’s wife.
Prosecutors plan to continue tracking the flow of funds stolen by CEO Chung. Regarding the mainstream investigation into Baekhyun-dong’s corruption, officials from Seongnam City and Seongnam Provincial Government are called in as witnesses for investigation.
As soon as the related investigation is completed, Jeong Jin-sang, former head of the political coordination office at the Democratic Party’s representative office, and Lee Jae-myung, the Democratic Party’s representative, are also expected to be summoned, who are accused of causing damage to Seongnam City by receiving a request for approval and permission from former CEO Kim.
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