Kim Man-bae and Nam Wook both retract prosecution statements… “The 15 billion won was money to block exposure of Yoo Dong-gyu’s bribery” - 경향신문

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Kim Man-bae, the major shareholder of Hwacheon Daeyu Asset Management, appears for a continued first-instance trial at the Seoul Central District Court in 2022 on allegations of lobbying and preferential treatment related to the Daejang-dong development project. Yonhap News

Private developers who were convicted at first instance on charges tied to the Daejang-dong development scandal have reversed their prior statements made during the prosecution (now the Public Prosecution Office) investigation in a related civil trial. They testified in court that the 15 billion won they had agreed to give a partner at the outset of the project was not a share for contributions to the development, but ‘payment for silence’. Framed as having distorted facts to avoid what they describe as a targeted investigation by prosecutors at the time, attention now turns to whether a forthcoming special counsel on fabricated indictments will revisit this issue.

Civil Division 29 of the Seoul Central District Court (Presiding Judge Ko Seung-il) on the 12th conducted witness examinations of Nam Wook and Kim Man-bae in a lawsuit in which early Daejang-dong private developer Jeong Jae-chang seeks payment of a 3 billion won agreed sum from accountant Jeong Young-hak.

In their testimony, Nam and Kim stated that the 9 billion won that Jeong Jae-chang was to receive from accountant Jeong was in return for not exposing the fact that bribes had been given to Yoo Dong-gyu, former head of the Planning Division at Seongnam Development Corporation. Kim said, “I thought that if we gave him money, Jeong Jae-chang would not expose the fact that money was given to Yoo Dong-gyu.”

Kim said that although he did not participate in offering the bribe, he agreed to give Jeong Jae-chang a total of 15 billion won out of concern that the Daejang-dong project might collapse. He explained, “You made the mess, so you clean it up,” indicating that Nam would shoulder 6 billion won and accountant Jeong 9 billion won. Nam also stated, “At the time, Jeong Jae-chang said he would keep harassing me until I committed suicide.”

This case is a dispute over profit allocation among the Daejang-dong private developers. Jeong Jae-chang, Nam, accountant Jeong, and others jointly pursued the Daejang-dong project in its early days. After falling out with his partners, Jeong Jae-chang dropped out of the Daejang-dong project and took part only in the Wirye New Town development. However, when profits from the Daejang-dong project were projected to exceed 400 billion won, conflict erupted as he claimed a share.

In 2021, Jeong Jae-chang agreed to receive 9 billion won from accountant Jeong in connection with the Daejang-dong project, but he filed a claim for the agreed sum, saying he received only 6 billion won and not the remaining 3 billion won. Accountant Jeong, on the other hand, argued that the agreement was coerced and therefore void. He contended that Jeong Jae-chang extorted 6 billion won by threatening, “I will expose the fact that bribes were given to the former division head Yoo.”

On the 1st, at the Seoul High Court in Seocho-gu, Seoul, Nam Wook heads to the courtroom to appear as a witness at the first hearing on appeal in the case of former People Power Party lawmaker Gwak Sang-do, who is accused of receiving 5 billion won in bribes from private developer Kim Man-bae in the Daejang-dong project. Yonhap News

The testimony by Kim and Nam that day overturned their previous statements to prosecutors. They had told prosecutors that the money given to Jeong Jae-chang was to recognize his contribution as a participant in the early Daejang-dong development. The Seoul Central District Prosecutors Office (now the Seoul Central District Public Prosecution Office) cleared Jeong of charges last June based on their statements and other grounds.

The planned special counsel on fabricated indictments will also investigate the Daejang-dong corruption case. Positions and statements by figures involved in the case appear to be shifting ahead of the special counsel.

In court that day, Kim asserted that he gave statements inconsistent with the facts because he feared a separate investigation by prosecutors. He said, “I was afraid of being framed as a co-conspirator to intimidation and being detained,” and, “Accountant Jeong tried to paint me as the main culprit in the president case, so I did not tell all the facts. I spoke only in part.”

Regarding the non-indictment decision by prosecutors, Kim said, “I suspect they made the decision without accurately ascertaining the facts,” and, “Since I saw the purpose of the prosecutors as seeking to detain me further on a separate matter, there were many aspects in which I testified leaving out facts to protect myself.” Nam added, “The reason for the non-indictment by prosecutors will be revealed before the special counsel,” and, “Among us, the only person whose assets were not preserved for forfeiture and collection was Jeong Jae-chang.” The implication is that Jeong received favorable treatment because he cooperated with the prosecution investigation.

Nam also changed his testimony about the intended recipients of the 310 million won in bribes passed to former division head Yoo. In the 2022 Daejang-dong corruption trial, he said, “At the time, Dong-gyu said it was ‘money to be delivered to important people’,” identifying as recipients Jeong Jin-sang, former head of political coordination in the office of the Democratic Party leader and a close aide to President Lee Jae Myung, and Kim Yong, deputy head of the Democracy Institute. However, at the trial of former chief Jeong Jin-sang last September, he said, “It was something I first heard from a prosecutor while I was under investigation in 2021.” At a National Assembly inquiry held in April, he also said he had been pressured by prosecutors during the process of giving his statements.

The fact that they delivered 310 million won to former division head Yoo was found guilty at the first-instance trial in the Daejang-dong corruption case. At the time, the court acknowledged the bribery charge against Yoo but determined that the money had not been passed up the chain. Their appeal hearing is set for the 27th of this month for closing arguments. Since the Public Prosecution Office has abandoned its appeal, the defendants cannot receive a higher sentence.