Seongnam Mayor Shin Sang-jin vowed to take every necessary measure to ensure that "not a single won that should go back to Seongnam citizens is taken by criminals," adding that the city would "mobilize all available resources to protect citizens' rights and uphold social justice to the end."
Seongnam Urban Development Corporation has filed a fraudulent conveyance lawsuit to recover funds that Daejang-dong development project private operator Kim Man-bae allegedly diverted to his spouse, stepping up legal action to reclaim public assets.
The corporation announced Friday it had filed the suit at the Seongnam Branch of Suwon District Court, seeking to claw back 2.2 billion won ($1.64 million) that Kim transferred to his spouse. The corporation believes the funds were used to purchase land in Gwonseon-gu, Suwon.
Earlier, prosecutors indicted Kim and others after determining that the corporation had suffered approximately 489.5 billion won in financial losses, based on dividend profits and other returns it should have secured during the Daejang-dong development. In the first criminal trial, whose verdict was handed down Oct. 31 last year, the court recognized that the corporation had sustained financial damages through the project and assessed those losses at approximately 112.8 billion won.
On that basis, the corporation has continued its legal campaign to recover public assets — pursuing asset preservation orders and lawsuits on the grounds that Kim bears liability for damages of at least 112.8 billion won, the amount recognized in the first criminal trial.
According to the corporation, Kim transferred 2.2 billion won from Cheonhwa Dongin No. 2 — a company he effectively controlled — to his spouse's bank account in October 2021, while prosecutors were investigating the Daejang-dong allegations. The following October, his spouse used the money to purchase land in Gwonseon-gu, Suwon for 2.2 billion won and completed the transfer of ownership registration in her name.
A fraudulent conveyance lawsuit seeks to rescind a transaction and restore assets to their original state when a debtor, knowing the act will harm creditors, transfers property or otherwise obstructs creditors from exercising their rights. Such suits must be filed within one year of the date the grounds for rescission became known, and within five years of the date of the legal act.
The corporation contends that Kim, while liable for damages to the corporation, reduced his attachable assets by diverting funds to his spouse — an act it regards as fraudulent conveyance that harms the corporation as a creditor.
The corporation also notes that the spouse, who served as an inside director of Cheonhwa Dongin No. 2, would have been fully aware of Kim's financial position and debt obligations at the time she received the funds.
The corporation is demanding that the spouse cancel the gift agreement and pay 2.2 billion won to the corporation. At the same time, it has applied for a provisional seizure of the Suwon land worth 2.2 billion won to prevent its disposal during the proceedings.
Including the latest application for provisional seizure of the Suwon property, the corporation has now pursued a total of 14 real estate preservation orders covering 18 properties to secure assets from those involved in the Daejang-dong case. The corporation estimates the combined market value of those properties at around 100 billion won.
The corporation said it will continue tracking assets held under borrowed names or concealed by Kim and other criminal defendants, and will review additional legal action — including further lawsuits — to secure its claims against any assets identified.
The corporation plans to keep monitoring developments in the Daejang-dong criminal trials and the defendants' financial affairs, and to pursue follow-up measures as needed to recover public assets.
fob140@heraldcorp.com
