CONTROVERSY OVER LEE'S DEVELOPMENT PROJECT

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This time some political news relating rival parties’ presidential hopefuls. Controversy is brewing over allegations surrounding a development project in Seongnam involving the ruling camp’s lead contender Lee Jae-myung. The main opposition has even visited the site calling for a parliamentary inquiry which has prompted Lee to request an open investigation into the matter.

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The latest allegations involving the Gyeonggido Province governor were first triggered by the excessively high return rate for private investors. Some critics suspect it may be a case of preferential treatment. The development company and individual investors provided funds of 350 million won to the project and received 400 billion won in dividends, a profit of over 1,000 fold.

[Soundbite] Yun Chang-hyun(PPP lawmaker) : "The return is 115,345%. Have you ever seen such a profit?"

Lee Jae-myung’s camp refutes the claim, saying it’s not accurate to measure the profit ratio only based on the money invested.

[Soundbite] Song Pyeong-su(Lee Jae-myung camp spokesperson(CBS radio show, Sept. 16)) : "It’s not necessarily the case in real estate business due to public subscription costs and guarantees on huge sums of money."

Even so, the dividend rate for private investors is 15 times higher than what was earned by the Seongnam Development Corporation. Lee’s camp explains that based on a profit projection model, the public sector was meant to collect dividends in preferred stocks and the private sector in common stocks which carry a higher risk. The ambiguous identity of seven ordinary investors who earned handsome profits through the development project also fuels suspicions that Lee could be involved in the alleged preferential treatment. KBS set out to verify the identity of these figures through register records. Four of the seven were found to be major shareholders, family and acquaintances of the development firm called Hwacheon Daeyu Asset Management. The other three are figures related to a lawyer who was the president of a company that sought to develop this region before Hwacheon Daeyu.

[Soundbite] (Representative of investor related to Cheonhwadongin Co.(VOICE MODIFIED)) : "Our lawyer is in the U.S. at the moment.:

The controversy is spilling over to the entire political circle. The main opposition bloc set up a task force and is taking aim at the governor. They highlighted the speedy process through which the developer was chosen.

[Soundbite] Kim Gi-hyeon(PPP floor leader) : "We can see the project had 100% guarantee to succeed. The selection of firms was hastily conducted. Everything was preplanned."

The presidential hopeful has also taken on the PPP demanding the party first reveal the relationship between Hwacheon Daeyu and its lawmaker Kwak Sang-do whose son is found to have worked at the firm. But it’s not only the opposition Lee needs to fend off, as criticism is also leveled by his primary rival Lee Nak-yon. The governor calls the allegations a witch hunt and has requested an investigation. Lee said if the probe clears the suspicions, he will hold accountable all parties that raised the speculation.