Go to Contents Go to Navigation

Asset firm owner at center of Seongnam development scandal appears for questioning

All News 11:04 October 11, 2021

SEOUL, Oct. 11 (Yonhap) -- The owner of an asset management firm at the center of a snowballing regional development corruption scandal appeared before prosecutors Monday for questioning over allegations his firm received massive business favors in exchange for bribes.

The scandal centers on revelations that the previously unheard-of asset management firm, Hwacheon Daeyu, and its seven affiliates reaped profits of more than 1,000 times their investments after the firm was selected as a civilian partner for a 2015 development project in Seongnam, south of Seoul.

Kim Man-bae, a former journalist who owns the asset firm, was accused of colluding with Yoo Dong-gyu, acting president of Seongnam Development Corp. in charge of the city-run project, to get his firm selected for the lucrative project to develop Seongnam's Daejang-dong district into apartment complexes.

Kim allegedly gave Yoo 500 million won (US$418,769) under a deal to give him a total of 70 billion won. Allegations have also been raised that Yoo is the real owner of one of the firm's seven subsidiaries, Cheonhwa Dongin No. 1, that is owned on paper by Kim.

Yoo has already been arrested on charges of breach of trust and bribe-taking.

On Monday, Kim denied wrongdoing, arguing that he is the real owner of Cheonhwa Dongin No. 1 and claiming the allegations against him have been wrongfully raised by one of his business partners at odds over how profits should be divided.

"I am very sorry for causing a disturbance," Kim told reporters upon arriving at the Seoul Central District Prosecutors' Office. "No illegal funds have been traded. Many of the suspicions that have been raised so far will be resolved if the prosecution looks into the list of money deposits and withdrawals."

Kim Man-bae, owner of asset management firm, Hwacheon Daeyu, speaks to reporters after arriving at the Seoul Central District Prosecutors' Office on Oct. 11, 2021, for questioning. (Yonhap)

The scandal has been the hottest issue in South Korea amid opposition accusations that Gyeonggi Province Gov. Lee Jae-myung, who won the ruling Democratic Party's presidential nomination Sunday, is responsible as mayor of Seongnam at the time.

Yoo is considered a close associate of Lee, and it was when Lee was mayor that the Daejang-dong project was undertaken. Moreover, Kim interviewed Lee seven months before establishing the asset firm.

The main opposition People Power Party (PPP) has accused Lee of masterminding the whole scheme, and called for an independent counsel investigation into the scandal while urging Lee to step down as presidential candidate.

However, Lee has categorically rejected all allegations as "fake news."

Kim is also suspected of paying high-profile, influential people in the legal community, like former Supreme Court Justice Kwon Soon-il and a former special prosecutor, in the form of hiring them as its legal advisers.

Kwon was one of the highest court's justices who ruled in favor of Lee, who was accused of violating the election law. Before the decision, Kim was found to have visited Kwon many times as a reporter, spurring suspicions that Kim could have lobbied for Lee.

Kim flatly rejected the suspicions.

"The judiciary of our country isn't an organization that can be swayed like that," he said. "The talk about (Lee's) trial is so absurd."

Send Feedback
How can we improve?
Thanks for your feedback!