COURT HEARING ON LAND SCANDAL

[Anchor Lead]

The first court hearing into the Daejong-dong development scandal has been held. Kim Man-bae, a major shareholder of Hwacheondaeyu, said the project was in line with Seongnam City's policies. Most of the defendants denied the allegations against them. Only accountant Jeong Young-hak, known as the mastermind of the project, admitted to the charges.

[Pkg]

The first court hearing into the Daejang-dong scandal was focused on possible breach of trust charges. Prosecutors claim that former Seongnam Development Corporation executive Yoo Dong-kyu plotted with others to devise favorable application guidelines for Hwacheondaeyu, thus incurring losses of at least 180 billion won to the corporation. Kim Man-bae, a major shareholder of Hwacheondaeyu, said the project was carried out in line with the instructions issued by then-Seongnam Mayor Lee Jae-myung to ensure it proceeded without mishaps. He added the firm just applied to carry out the project according to Seongnam City's guidelines on land development by the public and private sectors, adding that he did not conspire to anything. Kim stressed Hwacheondaeyu's profits were a result of a highly risky investment, not breach of trust. Yoo Dong-kyu and lawyer Nam Wook, both indicted along with Kim, also denied the allegations. Lawyer Chung Min-yong, who had been indicted separately but was tried in court together, denied he conspired with the four key figures in the scandal. Accountant Jeong Young-hak, known as the mastermind of the project, apologized for the scandal and admitted to the charges. It was Jeong's first public appearance since the Daejang-dong scandal erupted.

[Soundbite] Jeong Young-hak(Accountant, Owner of Cheonhwadongin No. 5) : "(The other defendants have denied the charges. Why did you admit them?) ....."

The next court hearing is scheduled for Jan. 17. The judges plan to subpoena, as a witness, a corporate official who was in charge of the land development project at the time. The official will likely be questioned on the application guidelines and their modification.