Prosecutors Raid Industrial Bank and Hoban Construction over Gwak Sang-do's 5 Billion Bribe Allegation (Comprehensive)

by Kim HyeongMin

Published 24 Apr.2023 17:25(KST)

The prosecution investigating the '5 billion won bribery suspicion' involving former lawmaker Gwak Sang-do and his son Byeong-chae has conducted a search and seizure at the Korea Development Bank and Hoban Construction.

Former People Power Party lawmaker Kwak Sang-do, who is accused of receiving bribes under the pretext of his son's severance pay from the Daejang-dong group, is attending the first trial sentencing hearing related to violations of the Act on the Aggravated Punishment of Specific Crimes at the Seoul Central District Court in Seocho-gu, Seoul on the 8th. Photo by Kang Jin-hyung aymsdream@

The Anti-Corruption Investigation Division 3 of the Seoul Central District Prosecutors' Office (Chief Prosecutor Kang Baek-shin) is conducting a search and seizure of email servers and other related materials from the Korea Development Bank, Hoban Construction, and other related parties on the 24th in connection with former lawmaker Gwak and his son Byeong-chae's alleged violations of the Act on the Aggravated Punishment of Specific Economic Crimes, including concealment of criminal proceeds. This search and seizure is reported to be a continuation of the one conducted on the 11th. At that time, the prosecution searched about ten places including Hoban Construction and Bukuk Securities, and they proceeded on this day to secure additional evidence.

The prosecution suspects that in 2015, former lawmaker Gwak prevented the collapse of the Seongnam-e Deul consortium, which included Hwacheon Daeyu Asset Management, and in return, received 5 billion won from Kim Man-bae, the major shareholder of Hwacheon Daeyu, under the pretext of retirement pay for his son Byeong-chae.

In the 2015 Daejang-dong development project bid, three groups applied: the Seongnam-e Deul consortium, the Korea Development Bank consortium, and the Meritz Securities consortium. At that time, Hoban Construction, which belonged to the Korea Development Bank consortium, proposed to Hana Bank to join, putting the originally planned participation of Hana Bank in the Seongnam-e Deul consortium at risk of collapse.

The prosecution believes that former lawmaker Gwak, at Kim's request, exerted influence on Hana Bank to prevent this.

The first trial court, which heard the case of former lawmaker Gwak, ruled in February that it was difficult to consider Gwak and his son as an 'economic community' and did not recognize the 5 billion won retirement pay received by Byeong-chae as a bribe. After appealing and conducting additional investigations, the prosecution has now registered Byeong-chae as an accomplice in receiving the 5 billion won bribe and charged him with bribery under the Act on the Aggravated Punishment of Specific Economic Crimes.

Meanwhile, former lawmaker Gwak issued a statement on the day expressing regret, saying, "They conducted a separate search and seizure."

He claimed that since the search and seizure was related to the 'consortium collapse crisis,' which was the premise of the charge of solicitation under the Act on the Aggravated Punishment of Specific Economic Crimes for which he was already indicted and acquitted, it was unrelated to the charge of violating the Act on the Aggravated Punishment of Specific Economic Crimes as stated in the warrant.

Former lawmaker Gwak said, "There is no reason to oppose clearly clarifying the facts," but added, "I hope that the search warrant will be requested through formal procedures to the court where the appeal trial is ongoing to avoid controversy over illegal investigations, and that an investigation will also be conducted regarding the possibility of third-party involvement in Hana Bank's consortium participation confirmation process."

He also argued, "If Hoban Construction pressured Hana Bank to join the Korea Development Bank consortium, it could constitute obstruction of business by collusion and unfair joint acts under the Fair Trade Act," and insisted that this should also be investigated.