The speeding police… Investigation by Summons of Kwak Sang-do’s son, Cheonhwadongin No. 1 representative

The police, who are investigating suspicions of preferential treatment for the Daejang-dong development project in Seongnam-si, are speeding up the investigation by summoning key officials, including the son of Kwak Sang-do, who received 5 billion won in severance pay from Hwacheon Daeyu Asset Management (Hwacheon Daeyu), and Lee Han-seong, CEO of Cheonhwa-dongin No.

A 50-year-old businessman, a relative of former special prosecutor Park Young-soo, who was found to have received 10 billion won from Kim Man-bae, the major shareholder of Hwacheon Daewoo, was also investigated by the police on the same day as a witness.

The Gyeonggi Southern Police Agency’s dedicated investigation team summoned and investigated Kwak’s son Byeong-chae from 2 p.m. to 7 hours.

Byeong-chae joined Hwacheon Daeyu in June 2015 and worked until March of this year before leaving the company. After tax, the real amount received was 2.8 billion won.

Earlier, a civic group, the People’s Solidarity for Anti-Corruption, said, “Byung-chae’s severance pay is much higher than that of a professional manager who has served at a large corporation for 20 to 30 years, and it is presumed to be a bribe in return for Kwak.” Last month, Lee Seong-moon, the former CEO, and an accountant were charged with bribery and breach of trust.

Hwacheon Daeyu and Byeong-chae explained, “I suffered an industrial accident while working and the company provided a corresponding compensation.” However, the passport and civic groups are raising the possibility that the money could be a costly bribe.

There was a stir when the real names of six members of the so-called ‘Hwacheon Daeyu 5 Billion Club’ were mentioned in the National Supervisory Service of the Financial Services Commission of the Political Affairs Committee, including Rep. Kwak.

After completing the investigation, Byeong-chae answered a reporter’s question about the appropriateness of the severance pay and where to use it, only saying, “I worked diligently in the investigation.”

The investigation into Cheonhwa-dongin No. 1 CEO Lee Han-seong also started around 1 pm on the same day and lasted for about 10 hours.

Prior to the police appearance, CEO Lee replied, “That doesn’t make sense” to a reporter who said that the dividend was used as a political donation.

Regarding a townhouse in Unjung-dong (Seopan-gyo), Bundang-gu, Seongnam-si, which Cheonhwa-dongin No. 1 bought for 6.2 billion won in October 2019, he said, “I signed the contract myself.”

When asked if the use of the townhouse was the same as that stated by Kim Man-bae, the largest shareholder of Hwacheon Daeyu, he answered “yes”.

After the investigation, CEO Lee answered, “I just did my best to explain as I was,” to a reporter’s question about the allegations of preferential treatment and the use of dividends.

When asked if he had ever received any preferential treatment in the Daejang-dong project, he said, “There is no such thing.”

CEO Lee is currently a suspect, and on the 30th of last month, he was banned from leaving the country along with Mr. Kim and former CEO of Hwacheon Daeyu Lee Seong-moon.

Earlier, the Financial Intelligence Unit (FIU) notified the police in April that suspicious money flows were found in the 2019-2020 financial transactions of Mr. Kim and former CEO Lee.

According to the Hwacheon Daewoo audit report posted on the electronic disclosure system of the Financial Supervisory Service, former CEO Lee borrowed 2.68 billion won from Hwacheon Daewoo in 2019 and repaid it, and last year he borrowed 1.2 billion won with other management.

It was announced that Kim had borrowed 47.3 billion won in the name of long-term loans until last year.

In the process, the police are looking to see if they have caused damage to the corporation or have personally used corporate funds.

Lee, who was summoned as a witness, is said to have received 10 billion won out of 47.3 billion won borrowed from Hwacheon Daewoo as a long-term loan from Kim, the major shareholder of Hwacheon Daeyu.

Lee is related to former special prosecutor Park, and is currently the representative of a sales agency in Daejang-dong. He also served as the CEO of KOSDAQ listed company A until 2018, and former special prosecutor Park served as an outside director of company A for about a month from January 2014, and then retired due to ‘personal reasons’.

It was confirmed that Park’s son also worked for Lee’s other company for about three months from November 2015 to January 2016.

For this reason, there is a suspicion that some of the 10 billion won that Kim gave to Lee was ultimately passed on to former special prosecutor Park.

Kim’s lawyer told reporters on the same day, “It is true that Kim lent 10 billion won at Lee’s request for business, but it has nothing to do with former special prosecutor Park.”

Former Special Prosecutor Park also issued a statement and said, “Mr. Lee is a distant relative who is difficult to calculate.


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