Former Seongnam Development Corporation Planning Director Yoo Dong-gyu, indicted in the Daejang-dong development corruption suspicions, attends the first-instance sentencing trial at the Seoul Central District Court in Seocho-gu, Seoul on the 31st. Yonhap News. 

The court acknowledged collusion between the Seongnam Development Corporation and private developers in the Daejang-dong development project.

Regarding responsibility, it was determined that Yoo Dong-gyu, the former planning director of the corporation who was involved throughout the entire process, was effectively the "mastermind."

The court assessed that he, as the de facto person in charge, violated his duty as a manager and led the breach of trust, causing damage to the corporation.

There was no specific mention or judgment regarding President Lee Jae-myung, who was the final approving authority as the mayor at the time.

There was also no determination regarding the connection from the corporation to the city of Seongnam. The focus was on the criminal structure formed by the collusion between the corporation and private entities.

While there were comments on the relationship between private developers and the city, the focus was on the history and background of how those relationships were formed, and there were no clear instructions or approvals mentioned.

However, given that this is a first-instance ruling, political debates surrounding accountability are expected to continue based on this judgment.

The Seoul Central District Court's Criminal Division 22 (Presiding Judge Cho Hyung-woo) sentenced Yoo Dong-gyu and private developers involved in the Daejang-dong project to imprisonment ranging from 4 to 8 years each for complicity in embezzlement.

The court affirmed the prosecution's core indictment that there was collusion between the private developers and Yoo, resulting in enormous losses for the corporation.

The Daejang-dong development corruption suspicions initially surfaced as a controversy during the 20th presidential primary, with political debates concerning President Lee's involvement.

President Lee, as the mayor at the time, was separately indicted on charges of approving a business structure favorable to private developers, causing losses to the corporation.

The Seoul Central District Court's Criminal Division 33 (Presiding Judge Lee Jin-kwan) suspended President Lee's trial in accordance with Article 84 of the Constitution, which stipulates the president's immunity from prosecution. However, it remains to be seen whether the rulings from other courts on the main Daejang-dong case will influence future proceedings.

President Lee's side has claimed that they did not concede to the private developers' requests in the Daejang-dong project, and that the recovered development profits, including the costs for the 1st Industrial Complex parkification project, amounted to 550 billion won.

However, the court on this day determined that the corporation's profits amounted to only 182.2 billion won. The costs for the 1st Industrial Complex parkification project were not recognized as profits for the city of Seongnam.

The court ruled that the corporation, which held a 50% stake, incurred a risk of property damage due to the loss of the opportunity or right to gain the difference between 50% of the development profits and 182.2 billion won.

The court stated that while it was difficult to precisely determine the business profits at the time of signing the business agreement, it was seen that private developers anticipated development profits exceeding 400 billion won. This implies that the city and the corporation, which was established with city investment, incurred property damage.

Lawyer Nam Wook, indicted in the Daejang-dong development corruption suspicions, attends the first-instance sentencing trial at the Seoul Central District Court in Seocho-gu, Seoul on the 31st. Yonhap News. 

However, the court essentially determined that Yoo Dong-gyu was the main instigator of the Daejang-dong case.

Even though he played a primary role as an intermediate manager, the court found that he did not merely carry out instructions but actively led the breach of trust as the actual person in charge of the Daejang-dong project for the corporation.

The court pointed out the factual basis of Yoo's collusion with private developers in the preparation of the joint venture guidelines and the selection process for the preferred bidder, but it did not directly mention President Lee or make a judgment on his involvement.

The court, when explaining the relevance of the money received by Yoo Dong-gyu from lawyer Nam Wook in May 2013, stated, "Yoo Dong-gyu was in charge of implementing major pledges of Lee Jae-myung, such as preparing for the establishment of the corporation and planning the Daejang-dong and Wirye development projects, and had comprehensive practical authority, reporting directly to Lee Jae-myung or Jung Jin-sang without going through Seongnam City's relevant departments or the corporation's president."

Furthermore, it was stated, "The defendant was not in a position to unilaterally decide all major matters related to the Daejang-dong development project, and also showed aspects of playing the role of an intermediate manager, coordinating opinions with private developers in the major decision-making processes of Seongnam City's leadership."

However, regarding the process of determining the Daejang-dong development project in mid-2014, it was suggested that "the mayor of Seongnam at the time appeared to be able to relatively freely decide on the adoption method without knowing the extent of the collusion between Yoo Dong-gyu and the private developers," leaving open the possibility that President Lee's role was limited at that time.

The court also acknowledged that private developers such as Mr. Kim were effectively predetermined as project implementers, stating the reason as "there was assistance from private developers in the establishment of the corporation and in Lee Jae-myung's re-election as mayor of Seongnam, and collusion was formed among officials of Seongnam City and the corporation," but did not mention any further specific details.

Democratic Party presidential candidate Lee Jae-myung leaves the court after the first-instance continuation trial for 'Daejang-dong embezzlement and Seongnam FC bribery' concluded at the Seoul Central District Court in Seocho-gu, Seoul on April 29. Yonhap News. 

The Daejang-dong preferential treatment suspicions surfaced around September 2021, near the end of the 20th presidential primary.

The controversy escalated into an issue in the presidential race with suspicions that the significant profits gained by private developers in the Daejang-dong project were due to the assistance of then-Seongnam Mayor Lee Jae-myung.

When it was reported that Kim Man-bae mentioned in a recorded conversation held by the key figure, accountant Jeong, that half of the shares of Cheonhvadongin No. 1 belonged to 'that person,' suspicions arose that 'that person' was President Lee.

The cases derived from the Daejang-dong preferential treatment suspicions also acted as a judicial risk for President Lee.

In particular, the controversy continued after the Supreme Court ruled in favor of guilt in May regarding a case where he was indicted for violating the Public Official Election Act, concerning remarks made about the late Kim Moon-gi, a former official who died by suicide during the Daejang-dong investigation.

Yonhap News