Prosecutors sought the warrant to arrest Kim Man-bae on Tuesday on charges in connection with how his previously little-known firm, Hwacheon Daeyu Asset Management, reaped massive profits from a 2015 development project in the city of Seongnam, south of Seoul.
The former journalist allegedly colluded with Yoo Dong-gyu, then acting president of Seongnam Development Corp. in charge of the project, to engineer a contract between the two sides to remove a clause limiting the amount of profits that the firm could take from the project.
Prosecutors alleged that Kim caused more than 110 billion won ($92 million) of losses to the Seongnam city government by removing the clause. He was also accused of giving Yoo 500 million won as part of a deal to pay him a total of 70 billion won.
Kim also allegedly paid a 5 billion-won bribe to the son of Rep. Kwak Sang-do, in the name of severance pay, to curry favor with the lawmaker.
Kim has denied all allegations against him.
The scandal has reverberated widely not only because of the scale of profits that Hwacheon Daeyu and its seven affiliates amassed but also because of its possible impact on the presidential race as Yoo is considered a close aide to Gyeonggi Gov. Lee Jae-myung, the ruling Democratic Party’s presidential nominee.
The main opposition party has accused Lee of masterminding the whole scheme and has called for an independent counsel investigation into the scandal while urging Lee to step down as presidential candidate.
Thursday’s court questioning is expected to last until the evening. (Yonhap)Internet Explorer Channel Network