Kim Man-bae (left) and Nam Wook (right). The two figures were put under arrest early Thursday in connection to prosecutors' investigation on a land development scandal. (Yonhap)
Two key suspects in a land development scandal were arrested early Thursday as investigators continue to delve into one of the largest-ever land development scandals in South Korea.
The Seoul Central District Court on early Thursday issued arrest warrants for Kim Man-bae, owner of Hwacheon Daeyu Asset Management, and Nam Wook, a lawyer who is suspected of involvement in the scandal. The two have been under investigation on suspicion of breach of trust and bribery in connection to the scandal.
The court said the two posed a flight risk and might destroy evidence. But the court rejected a warrant for Chung Min-yong, who is suspected of conspiring with the two in the scandal.
Kim and Nam have been accused of unfairly and illegally making astronomical profits from a land development project in Daejang-dong, Seongnam, Gyeonggi Province, in 2015.
Prosecutors suspect Kim colluded with Yoo Dong-gyu, former acting chief of Seongnam Development Corp., to rig the public bidding procedure in favor of Hwacheon Daeyu and others involved to have the firm picked as the private partner for the development project.
Hwacheon Daeyu is believed to have profited around 65.1 billion won ($55 million) from the project. Yoo is currently under arrest in connection to the scandal.
Investigation has been centered on uncovering who the mastermind is behind the project, with some impact expected in the upcoming presidential election. The project took place when Lee Jae-myung, presidential nominee for the ruling Democratic Party of Korea, served as mayor of Seongnam before serving as the governor of Gyeonggi Province.
In a recorded phone call, Kim was heard denying that he was the owner of Hwacheon Daeyu and its affiliates, saying half of the firm in question belongs to an unnamed person. Opposition lawmakers have claimed that the unnamed person is Lee.
The former Gyeonggi Province governor has denied the allegation, arguing he was never the real owner of Hwacheon Daeyu and he would never have done anything to benefit his opposition.
Lee has instead asserted the Daejang-dong development project as his major accomplishment for being the largest publicly driven real estate initiative, turning a profit of around 500 billion won, 70 percent. He has claimed that he was unware of illegal acts behind the project, saying his “misdeed” is limited to mismanaging personnel placement.
The presidential candidate emphasized that those involved in the scandal must be severely punished, vowing to ensure that those involved are appropriately penalized if he becomes president.
Opposition lawmakers have argued that Lee is to be blamed and penalized for the project as well, as the project failed to produce affordable rental housing units or cap prices on the resulting units. They add the project had loopholes built in so that private investors could make unreasonable profits.
By Ko Jun-tae (email@example.com