(4th LD) Court denies arrest warrant for key suspect in land development scandal

All News 23:31 October 14, 2021

(ATTN: REWRITES headline, lead; UPDATES with more details)
By Chang Dong-woo

SEOUL, Oct. 14 (Yonhap) -- A Seoul court on Thursday rejected an arrest warrant for a key suspect at the center of a snowballing regional development corruption scandal, dealing a blow to the investigation into the case that has become the hottest topic in South Korean politics.

The Seoul Central District Court denied the prosecution's request to arrest Kim Man-bae, owner of an asset management firm, Hwacheon Daeyu Asset Management, on bribery and other charges, citing an insufficient explanation of the need to detain him.

Kim, a former journalist, has been under investigation in connection with how his previously little-known firm reaped massive profits from a 2015 project to develop the Daejang-dong district in the city of Seongnam, south of Seoul, into apartment complexes.

The former journalist allegedly colluded with Yoo Dong-gyu, then acting president of Seongnam Development Corp. in charge of the project, to engineer a contract between the two sides to remove a clause limiting the amount of profits that the firm could take from the project.

Prosecutors alleged that Kim caused more than 110 billion won (US$92 million) of losses to the Seongnam city government by removing the clause. He was also accused of giving Yoo 500 million won as part of a deal to pay him a total of 70 billion won.

Yoo is considered a close aide to Gyeonggi Gov. Lee Jae-myung, the ruling party's presidential nominee, and Lee served as Seongnam mayor from 2010-2018. Kim also interviewed Lee seven months before setting up his asset firm.

The main opposition People Power Party has claimed Lee must be behind the whole scheme.

Kim denies all allegations against him, including his relations with Lee.

"We have no special relationship," Kim said Thursday when asked about his ties with Lee, adding he met the governor just once for an interview.

He also rebutted reports of him having said in private that an unidentified person was entitled to half of the massive profits that Cheonhwa Dongin No. 1, an affiliate of Hwacheon Daeyu, gained from the project.

Yoon Seok-youl, former prosecutor general and a leading opposition presidential hopeful, claimed that Lee was the person in question and urged him to admit to the allegations and volunteer to be investigated.

"Such a person does not exist, and I don't remember saying as such," Kim said.

The former journalist is also accused of allegedly paying a 5 billion-won bribe to the son of Rep. Kwak Sang-do, in the name of severance pay, to curry favor with the lawmaker.