[fn Editorial] Prosecution’s Decision to Drop Appeal in ‘Daejang-dong’ Case Will Undermine Trust in Public Development

The aftermath of the prosecution’s decision to forgo an appeal in the Daejang-dong Development Corruption Scandal continues to grow. With it now difficult to recover a significant portion of the billions in profits monopolized by developers, controversy is escalating over the existence of external pressure.
The Daejang-dong Development Corruption Scandal involved allegations of corruption in which private companies, despite holding only a minority stake, took over 90% of the total development profits. At the end of last month, the court of first instance found the defendants guilty of breach of trust and other charges, sentencing them to four to eight years in prison. However, they were acquitted of aggravated breach of trust under the Act on the Aggravated Punishment of Specific Economic Crimes. Frontline prosecutors argued that a legal review of the main charges was necessary and pushed for an appeal, but the prosecution’s leadership concluded that, since heavy sentences had already been handed down, an appeal would have little practical benefit. It is unprecedented for prosecutors to forgo an appeal in a major corruption case when the key charges have resulted in acquittal.
Suspicions are growing that political pressure may have influenced the decision to drop the appeal. The investigation team at the Seoul Central District Prosecutors' Office decided to appeal and even received approval from the chief prosecutor, but within hours, the leadership at the Supreme Prosecutors' Office of the Republic of Korea and the Seoul Central District Prosecutors' Office put the appeal on hold. This process is difficult to understand. On the 10th, Minister Jung Sung-ho said, “I merely expressed that a reasonable decision should be made after considering various factors, but I did not issue any directives.” However, he did not provide specific comments on the legal issues that led to the acquittal, which only raises further questions.
The ruling party claims this is not a withdrawal of the appeal but rather a restraint from appealing, while the opposition party criticizes the decision, saying, “Injustice flows like sewage.” Although the prosecution’s past practice of ‘automatic appeals’ has been problematic, this decision is difficult to defend, as it means the government has voluntarily given up the opportunity to recover criminal proceeds. Beyond political strife, this could send the wrong signal to the market.
The greater concern is that this case could undermine trust in public development as a whole. The most important elements in public projects are predictability and fairness. Private companies participate in such projects on the premise that rules will be applied consistently. However, with fairness already damaged by the Daejang-dong incident, the decision to drop the appeal now shakes the social consensus that ‘illegitimate profits will always be reclaimed.’ As the government actively utilizes public development to stabilize housing, this is a serious issue that could erode the credibility of housing policy.
To restore trust in public development, clear principles and transparent procedures are essential. Institutional reforms must be expedited, such as fully disclosing the profit structure of private participants in future projects and ensuring the recovery of excessive development gains. Furthermore, those responsible for the decision to drop the appeal must be clearly identified to dispel public suspicion. Public development is a public good that directly affects people’s lives. Opportunities for collusion between business and politics must be eliminated at the source, and the principle of fairness, which has been undermined, must be swiftly reestablished.