Daejang-dong corruption: Prosecution drops appeal; appellate court can only uphold or reduce penalties

The appellate trial in the Daejang-dong private developers corruption case opened today, but the proceedings looked markedly different from a typical high-profile hearing. Prosecutors decided not to pursue an appeal, leaving only a single senior prosecutor in court.

Defendants Kim Man-bae, Nam Wook, and Jeong Young-hak—who were convicted in the first trial—entered the courtroom to defend themselves on appeal. They were represented by major law firms: Kim by Taepyeongyang, Nam by Gwangjang, and Jeong Young-hak by HwaWoo. Former Seongnam Urban Development Corporation planning chief Yoo Dong-gyu, who was charged in connection with the case, acknowledged criminal responsibility and asked for leniency.

With the prosecution withdrawing its appeal, the court’s options are constrained by the principle of non-disadvantageous change under Korean criminal procedure. In practical terms, the appellate panel cannot impose a harsher sentence than the four-to-eight-year prison range handed down in the first trial, nor can it raise the amount of asset forfeiture beyond what the first court already recognized.

In the first trial, prosecutors sought forfeiture of illicit development gains totaling 7,814억 원 (about 781.4 billion won). However, because the prosecution did not appeal, the appellate court can only maintain or reduce the original asset-forfeiture figure. The first trial had already upheld a forfeiture order of 473억 원 (about 47.3 billion won), and that amount remains the upper limit under the non-disadvantageous-change principle.

The case centers on the so-called Daejang-dong development project in Seongnam, a city just south of Seoul, and a dispute over how development profits were distributed between private developers and a public development agency. The outcome of the appeal thus carries implications for South Korea’s management of public-private partnerships, corporate governance norms, and the broader risk environment for investors involved in large-scale urban projects.

For international readers, the proceedings illustrate how high-stakes corruption cases in Korea unfold, with prominent business figures employing top-tier law firms and engaging in complex asset-forfeiture debates. The decision in the appellate court will determine whether the first trial’s sanctions stand as-is or face adjustments within the legal limits now in play.

In the near term, observers will be watching to see if the appellate panel issues a ruling before concluding whether the sanctions from the first trial will stand. Given the prosecution’s decision not to appeal, changes on this occasion are unlikely beyond confirming or reducing the established penalties and forfeiture.