The Korea Herald


Key suspect of land corruption scandal hospitalized

By Son Ji-hyoung

Published : Dec. 15, 2022 - 14:45

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Kim Man-bae (Yonhap) Kim Man-bae (Yonhap)

A key suspect of a high-profile land corruption scandal in South Korea was sent to hospital Thursday after he stabbed himself with a knife in an apparent suicide attempt.

The suspect Kim Man-bae was in stable condition, but was hospitalized in an intensive care unit of Ajou University Hospital in Suwon, Gyeonggi Province, due to injuries in his neck and chest.

Kim was found by his attorney inside his private car on Wednesday.

Kim, a former journalist, is one of the shareholders in asset management company Hwacheon Daeyu, which earned a huge amount of dividends from the land development project in Seongnam, Gyeonggi Province.

The prosecution is also seeking arrest warrants for two of Kim's close aides. Accused of concealing some 26 billion won ($20 million) in profits were Lee Han-sung, co-chief of Hwacheon Daeyu; and Choi Woo-hyang, former vice chairman of underwear maker Ssangbangwool.

Kim was released from detention in November, as the period of his detention expired after a year.

These are the latest developments of the so-called "Daejang-dong scandal" that stemmed from the lucrative housing development project launched in 2015.

Under the spotlight is the legitimacy over the disproportionate distribution of dividends to companies comprising a consortium to manage the land development project, fanning suspicions of corruption.

Hwacheon Daeyu and its related parties, which own a combined 7 percent stake in the consortium, had earned 404 billion won in dividends from 2019 to 2021, yielding over a 1,100-fold return on the inexperienced asset management company's investment. In contrast, Seongnam Development Corp., a public-sector company, took less than half of Hwacheon Daeyu's dividends despite having a 50 percent stake in the consortium.

The prosecution sees the move as the breach of trust, which in Korea is punishable by at least five years in prison if the profits that an entity gained amounts to over 5 billion won.

Law enforcement has claimed that Kim and Yoo Dong-kyu, former chief planning officer of Seongnam Development, had colluded to let Hwacheon Daeyu illegitimately take at least 65.1 billion won in profit that was supposed to go to Seongnam Development.

Two officials of the public-sector company involved in the plan were found dead in an apparent suicide in December 2021.

Kim is considered a key suspect as he reportedly holds knowledge about the top decisionmaker who approved the consortium's dividend plan.

Lee Jae-myung, leader of the main opposition Democratic Party of Korea, has been accused of being the top decisionmaker that approved the consortium's dividend payment structure, a court heard in October. Lee, the then Seongnam mayor, has flatly denied the allegation.