This article is by Michael Lee and read by an artificial voice.

[EXPLAINER]
The long-running saga over alleged corruption in the Daejang-dong development project in Seongnam, Gyeonggi, took an unexpected turn this month when prosecutors announced they would not contest the sentences handed down by the Seoul Central District Court against key defendants on Oct. 31.
By forgoing an appeal, the prosecution effectively abandoned the chance to argue that the defendants - a network of private investors, local officials and political aides - had committed aggravated breach of trust through their roles in the project. The decision also eases legal pressure on President Lee Jae Myung, who served as Seongnam's mayor when the project began.
The announcement immediately drew protests within the prosecution service and from lawmakers in the conservative People Power Party (PPP), who have long accused Lee of being at the center of the corruption network. The PPP alleged that the Ministry of Justice and the presidential office influenced the decision not to appeal - claims both institutions deny.

What is the Daejang-dong scandal?
The scandal stems from a redevelopment project launched in 2015 in the Daejang-dong area of Seongnam, a city just south of Seoul. The Seongnam Development Corporation (SDC), a municipal public enterprise, and Hana Bank led the project in a public-private partnership. Several private firms, including Hwacheon Daeyu Asset Management and its affiliates, were selected as investors.
According to court findings and media reports, Hwacheon Daeyu and related firms contributed only around 350 million won ($239,000) to the project, while public and financial institutions covered nearly 93 percent of total costs. Despite their small stake, the private companies reaped about 788.6 billion won in profit, of which prosecutors argue 489.5 billion won should have gone to the SDC, based on their calculation that 70 percent of profits from the project should have gone to the municipal developer.
This disproportionate profit distribution eventually drew scrutiny in late 2021, just as Lee began gearing up for his first unsuccessful presidential run. The findings of investigations launched that year contended that key SDC officials manipulated contracts to favor the private side in exchange for bribes or promises of future payoffs. The arrangement raised questions about how politically connected developers secured such advantageous terms - and who in Seongnam City Hall and the municipal developer approved them at the time.

Who was prosecuted?
Prosecutors charged Kim Man-bae, the majority shareholder of Hwacheon Daeyu Asset Management, with orchestrating the Daejang-dong profit scheme. Kim allegedly designed the development structure to channel most of the profits to private investors and promised to pay 42.8 billion won to Yoo Dong-gyu, the SDC's former acting president, in exchange for ensuring favorable contract terms.
In the Oct. 31 verdict, Kim was sentenced to eight years in prison and ordered to forfeit 42.8 billion won for breach of trust, while Yoo received the same prison term and a fine of 400 million won, in addition to forfeiting 810 million won. The court found that Yoo used his position at the SDC to approve project guidelines that guaranteed enormous returns for the private firms despite their minimal investment.
Other key participants included Nam Wook, a lawyer in charge of one of Hwacheon Daeyu's affiliates; Jeong Young-hak, an accountant who managed financial planning and recorded internal profit-sharing discussions; and Jeong Min-yong, former head of the SDC's Strategic Projects Team, who helped draft tender guidelines favorable to the private side. Each was convicted of participating in the profit-manipulation scheme, receiving prison terms ranging from four to six years, along with fines and asset forfeitures.

While these figures formed the core nexus of developers and SDC insiders behind the project, prosecu...

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