ALLEGATIONS SURROUNDING LAND SCANDAL

[Anchor Lead]

The key to allegations of preferential treatment in the Seongnam land development scandal lies in the absence of measures to retrieve excessive proceeds. Former executive of Seongnam Development Corporation Yoo Dong-kyu, arrested on breach of trust charges, argues that it’s not true that opinions urging the restitution of excess gains were ignored. However now public testimony has surfaced about how working-level officials at the time wanted to include a clause in the contract concerning excess proceeds.

[Pkg]

​The early stage of the Daejang-dong development project was led by the No. 2 development team of the Seongnam Development Corporation. However just 8 days before recruitment for the project was announced, the task suddenly went over to development team No. 1. The man surnamed Kim who served as the team captain back then, still works for the firm. He previously worked at a construction company and reportedly knew Yoo Dong-kyu since the time Yoo was a union chief for a remodeling project in Seongnam’s Jeongja-dong district. Members of the No. 2 development team at the time testified that it was Yoo who ordered the shift in the team in charge.

[Soundbite] Lee Hyeon-cheol(Seongnam Development Corp.(then-chief of No. 2 development team)) : "The change was made under Yoo’s order."

The No. 2 team had also partially conducted feasibility reviews on the Daejangdong project. Both teams are said to have conveyed the opinion about retrieving excess gains from the project to Yoo through another senior official also surnamed Yoo.

[Soundbite] Lee Hyeon-cheol(Seongnam Development Corp.(then-chief of No. 2 development team)) : "Since we can’t predict the economic situation, we wrote in the submitted letter that it’s necessary to review the potential gains."

However in the finalized guidelines, a phrase about recovering excess proceeds was left out.

[Soundbite] Lee Ki-in(Seongnam City Council(People Power Party)) : "Then what did Yoo do in response to that opinion?"

[Soundbite] Lee Hyeon-cheol(Seongnam Development Corp.(then-chief of No. 2 development team)) : "I was unaware of it for a while until I found that part was left out in the final guidelines for the project recruitment only after the contract was sealed."

Another speculation raised is that officials of the No. 1 team wrote a letter of opinion about including such a phrase after reviewing a draft contract with Hwacheondaeyu which invested in the project, but that very content was allegedly deleted after 7 hours. For 2 days, prosecutors grilled a man surnamed Kim, who served as the No. 1 team chief at the time, regarding the deleted clause and what role Yoo Dong-kyu might have played in the process. Reporters tried to contact the senior official who conveyed the opinion about retrieving excess gains to Yoo, but have not heard back from the individual.