'Cheongdam-dong Stock Tycoon' Lee Hee-jin's Building Finds New Owner for 36.9 Billion Won

Four Bidders Compete in Auction... Ewha Electric Wins Bid
Prime Location in Cheongdam-dong... Good Condition and Management
Second Place Is Runner-Up Bidder "Value Expected to Rise Further"

Miracle Building, Cheongdam-dong, Seoul (Photo by Gigi Auction)

[Asia Economy Reporter Moon Jiwon] The building in Cheongdam-dong, Seoul, owned by Lee Hee-jin (34), once known as the 'Cheongdam-dong Stock Millionaire,' has found a new owner at auction for 36.9 billion KRW. Despite the real estate market being sluggish recently due to the novel coronavirus disease (COVID-19), four bidders competed, resulting in a winning bid approximately 4.6 billion KRW higher than the minimum sale price.

According to industry sources on the 9th, the 'Miracle Building' located in Cheongdam-dong, Gangnam-gu, Seoul, was sold for 36.9 billion KRW at an auction held yesterday at the Seoul Central District Court Auction Division 8. The building was purchased in March 2016 by GA Investment (formerly Miracle Investment), where Lee serves as CEO.

The building has a mortgage of 35.3 billion KRW held by a loan company A and individuals, and there are also seizures and provisional seizures by Gangnam-gu, Uijeongbu Tax Office, and Seoul Southern District Prosecutors' Office. The total registered claims amount to approximately 36.79 billion KRW.

Located near Apgujeong Rodeo Station on the Bundang Line, the building spans from basement level 2 to the 6th floor above ground, with a land area of 1,002㎡ and a total floor area of 3,896㎡. The appraised value as of the end of March last year was about 40.423 billion KRW. After Lee was detained, the loan company that placed the mortgage in March last year filed for the start of the auction at the court.

The first auction held on February 26 was unsuccessful, lowering the minimum sale price to 32.3389 billion KRW. Four bidders, including Ewhwa Electric, participated in the auction yesterday. The company that placed the second-highest bid of 34.2 billion KRW has also registered as the secondary bidder in case Ewhwa Electric fails to pay the purchase price.

An industry insider explained, "Since the building is located almost in the heart of Cheongdam-dong, if managed well going forward, it is expected to be valued much higher in the future," adding, "The building's use approval date is 2013, so it is relatively new and well-maintained, almost like a new commercial building."

(Photo by Lee Hee-jin)

The new owner of the building is Ewhwa Electric, a power conversion equipment specialist with a 60-year history. Although the company recorded an operating loss of 3.6 billion KRW in 2018 and had been sluggish in recent years, it achieved sales exceeding 50 billion KRW last year and successfully returned to profitability. The acquisition price of the building accounts for 16.32% of the company's total assets (226 billion KRW), and it is known that they bid with expectations of investment returns.

Meanwhile, Lee, who was indicted on charges of illegal stock trading and investment solicitation, was sentenced by the Supreme Court in February to 3 years and 6 months in prison, a fine of 10 billion KRW, and a confiscation of approximately 12.267 billion KRW. He was accused of spreading false and exaggerated information about specific unlisted stocks through securities broadcasts, inducing investments from 204 people, resulting in losses amounting to about 25.1 billion KRW.

In the past, Lee was active as a stock expert and was known as the 'Cheongdam-dong Stock Millionaire' by flaunting luxury homes in Cheongdam-dong and expensive imported cars through social networking services (SNS).