Daejang-dong development trial begins Dec. 9 in Suwon District Court

A civil suit filed by the Seongnam Development Corporation against Seongnam Garden, the project operator behind the Daejang-dong development, is set to go to trial on Dec. 9.

Suwon District Court in Suwon, Gyeonggi is seen in this file photo [YONHAP]

A civil suit filed by the Seongnam Development Corporation against Seongnam Garden, the project operator behind the Daejang-dong development, is set to go to trial on Dec. 9 — nearly two and a half years after the complaint was first filed.

The Suwon District Court’s Seongnam branch has scheduled the first hearing for 4:10 p.m. on Dec. 9 in a case where the Seongnam Development Corporation is seeking to invalidate a series of dividend payments approved by Seongnam Garden, according to legal sources on Wednesday.

Seongnam Garden is a special-purpose corporation in which the Seongnam Development Corporation holds a 50 percent stake plus one share. It was established to oversee the Daejang-dong urban development project.

The city-run corporation claims that dividend payouts totaling approximately 400 billion won ($273 million) to private stakeholders — including Hwacheon Daeyu, majority shareholder Kim Man-bae and lawyer Nam Wook — violated the company’s articles of incorporation and the Commercial Act.

It also argues that the profits distributed were derived from land sale revenues that constitute proceeds of crime from the Daejang-dong breach of trust case.

The timing of the civil trial appears to reflect the court's view that conditions for proceeding were met after the first criminal rulings related to the Daejang-dong scandal were delivered on Oct. 31.

Kim Man-bae arrives at the Seoul Central District Court in Seocho District, southern Seoul, on Sept. 13, 2023. [NEWS1]

Additional civil suits filed by the Seongnam Development Corporation against other parties involved — including President Lee Jae Myung, who was mayor of Seongnam at the time, Kim and Nam — are also expected to move forward in earnest.

However, some defendants in the Daejang-dong case have recently petitioned the court to lift the provisional seizure of assets, raising concerns that even a civil court victory may not guarantee full restitution.

Nam, who had zero restitution ordered in the criminal trial, reportedly submitted a letter to the Seoul Central District Prosecutors' Office threatening to seek state compensation unless 51.4 billion won of his 207 billion won in frozen assets is released.

In response, the Seongnam city government submitted an opposing statement, arguing that the requests to lift asset freezes by Daejang-dong defendants are legally and socially unacceptable.

“If even parts of the seized assets are released,” the city said, “it will undermine the 405.4 billion won civil suit over invalid dividends filed by Seongnam and the Seongnam Development Corporation, and permanently eliminate the opportunity to restore citizens’ property rights.”

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom. BY JEONG JAE-HONG [lim.jeongwon@joongang.co.kr]