SEOUL-- Cheong Wa Dae is closely examining the circumstances surrounding a regional development corruption scandal that has recently shaken national politics over possible connections to Gyeonggi Province Gov. Lee Jae-myung, the front-runner in the ruling party's primary, a senior presidential official said Tuesday.

The Seoul Central District Prosecutors Office is investigating whether Yoo Dong-gyu, former acting president of Seongnam Development Corp. (SDC), was given acquiescence or even tacit approval by Lee when he was Seongnam mayor for how the public-civilian land development project would be operated. Under the project, a swath of farmland in Seongnam, a city just south of Seoul, was turned into apartment complexes.

The scandal centers on revelations that a previously unheard-of asset management firm, Hwacheon Daeyu, and its seven affiliates reaped profits of more than 1,000 times their investments after the firm was selected as a civilian partner for the 2015 project.

Speaking on the customary condition of anonymity, a senior Cheong Wa Dae official told reporters that the presidential office "considered the scandal as a stern subject matter and was closely monitoring (the situation)."

The official side-stepped questions as to whether President Moon Jae-in has shared his thoughts on the matter. "That is all we can share for now," the official replied.

Moon's office has refrained from commenting on the scandal, apparently to avoid affecting the ruling party's ongoing presidential primary in which Gov. Lee is commanding a comfortable lead within the ruling party race despite being accused by the main opposition of being "the designer" of the controversial development project.

A Cheong Wa Dae official, however, said Sunday that it would be "inappropriate" to demand a statement from Moon or his office on an ongoing investigation, in response to the main opposition party's demand that the president accept an independence counsel probe request.

Source: Yonhap News Agency