Ex-special counsel's relatives raided over Daejang-dong suspicions

Prosecutors on Tuesday raided the homes of former special counsel Park Young-soo’s daughter and wife, widening their probe into Park’s ties to a prominent land development scandal.

Former special counsel Park Young-soo is surrounded by reporters as he leaves the Seoul Central District Court in Seocho District, southern Seoul, after his warrant review hearing on June 29. [NEWS1]

Prosecutors on Tuesday raided the homes of former special counsel Park Young-soo’s daughter and wife, widening their probe into Park’s ties to a prominent land development scandal.

The probe’s expansion comes after the Seoul Central District Court last month rejected prosecutors’ arrest warrant request for Park, who is suspected of receiving 800 million won ($611,000) in bribes from private developers in return for lending Woori Bank’s support to the Daejang-dong development in Seongnam, Gyeonggi, in 2014.

Park served as the chair of Woori Bank’s board of directors after he rose to fame as the special counsel leading the investigation into the corruption case involving former President Park Geun-hye in 2017.

Prosecutors are now investigating 2.5 billion won ($1.98 million) that Park’s daughter received in total from Hwacheon Daeyu, an asset management company at the center of the Daejang-dong scandal, between 2016 and 2021.

According to the prosecution service, Park’s daughter was employed at Hwacheon Daeyu from June 2016 to September 2021, earning an annual salary of approximately 60 million won, or a total of 300 million won over five years.

But she also borrowed 1.1 billion won from the company through five loans made between September 2019 and February 2021, in addition to 800 million won she made in profit by selling an 84-square meter (904-square feet) apartment she bought from Hwacheon Daeyu in June 2021 at half of its assessed market price, according to a prosecution official who spoke to reporters on condition of anonymity.

The suspicions surrounding Park’s daughter have drawn attention for their similarities to allegations against the son of former People Power Party (PPP) lawmaker Kwak Sang-do, who was also employed at Hwacheon Daeyu as a mid-level employee for five years and nine months before quitting in March 2021.

Kwak is accused of accepting a bribe from Hwacheon Daeyu disguised as his son’s 5-billion-won severance package, which was more than 200 times his legally entitled payout.

Park and Kwak are just two individuals whom prosecutors suspect are members of the so-called “5 billion won” club of people who were each allegedly promised 5 billion won by Hwacheon Daeyu.

The company drew attention after it was able to join the 1.5 trillion-won Daejang-dong development launched by the Seongnam city government through a joint public-private consortium led by KEB-Hana Bank, despite having only 50 million won in capital and no prior record of participating in real estate developments.

Hwacheon Daeyu invested only 350 million won in the project and raked in 400 billion won in profit from the development, while the Seongnam Development Corporation, which is owned by the city government, earned only 183 billion won from its 25-billion-won investment in the project.

The scandal over Hwacheon Daeyu’s involvement in the Daejang-dong development figured prominently during the last presidential election because the project took off during Democratic Party leader Lee Jae-myung’s tenure as the mayor of Seongnam, where the development is located.

BY MICHAEL LEE [lee.junhyuk@joongang.co.kr]