The articles are kinda long so let me just summarized it for you.
About the recent controversy of 'City Conquest' being rejected by KBS wasn't really explained how and why.
And now they released a more thorough explanations.
▶ Media Baek actually received a letter of intent from KBS and was given a grace period to change writers until Jan 2013.
▶ KBS said that the violence of drama is considered inappropriate.
▶ KBS drama department organized a consultation process and requested by the senior officials to replace the drama's writer, script, actors,and the big production cost.
▶ KBS is trying to be careful this time that their government is under new management.
▶ City Conquest is a story of revenge to the society, that's why KBS wanted for the storyline to be changed.
▶ The content and feasibility of the drama is inappropriate to their newly inaugurated administration.
▶ But according to Media Baek, the storyline of City Conquest is just fiction (So nothing to worry about, it will actually help to improve growth and development for Korea).
▶ Baek Media also said that because of Kim Hyun Joong, the amount earned domestic and foreign is surprisingly high.
▶ To the fans waiting, Baek Media promised to implement a desperate effort and become the forefront of cultural export for Kroean Dramas.
▶ KBS drama department should acknowledge the fans domestic and foreign as soon as possible (not sure of this)
So basically, City Conquest got rejected because of Korea's new government. KBS probably is now being too careful not to get sued by the government for airing such drama with violence and revenge.
Since government is now connected to this issue, I think we might have to wait a little more longer for City Conquest.
Here's another article about this issue from https://en.korea.com
KBS: “City Conguest is insufficiently competitive”
On January 31, KBS made an official announcement on reasons why they decided not to air the TV series City Conquest through their network. KBS said, “We are very sorry that the production company for the series insists that our decision is an arrogation. They even said that we are feeling constraint in the new government, which is completely not true.”
“We held four meetings to review the series and whenever the series receives suspension we asked the production crew to make up for the weak points in the series.”
“However, the recent proposal that they handed in for the latest meeting is insufficiently competitive and contains a lot of violence to air through public broadcasters. That’s why we decided not to air the series,”
“We clearly stated on the letter that if the script for the series is insufficiently competitive, it is not allowed to air. Even though we made the decision through our official system, the production company is insisting that we are feeling constraint in the new government. They also used an expression on defamation of character.”
KBS added, “We are determined to sternly deal with the insist that the production company made.”