LH Employees Suspected of Preemptive Speculation Worth 10 Billion Won in Gwangmyeong·Siheung New Towns
Community Says "Is There a Law Prohibiting LH Employees from Investing?" in Brazen Defense
Ongoing Ministry of Land Corruption Issues... 2020 Public Institution Integrity Survey Ranks Lowest
Cheong Petition Demands "Strong National Audit on New Town Speculation Allegations"
People's Solidarity for Participatory Democracy: "Highly Professional Speculation... Serious Ethical Issues"
On the afternoon of the 3rd, people are moving toward the entrance of the Korea Land and Housing Corporation (LH) headquarters in Chungmugong-dong, Jinju-si, Gyeongnam. Photo by Yonhap News
[Asia Economy Reporter Kim Young-eun] Recently, allegations have surfaced that employees of the Korea Land and Housing Corporation (LH) purchased land in the Gwangmyeong and Siheung new towns in Gyeonggi Province ahead of time for speculative purposes, sparking public outrage. A related petition was posted on the Blue House's public petition board, and the People's Solidarity for Participatory Democracy criticized it as a "serious ethical issue." Meanwhile, some LH employees have even shown a brazen attitude, further fueling criticism.
On the 2nd, the People's Solidarity for Participatory Democracy and the Lawyers for a Democratic Society (Minbyun) held a press conference, alleging that about 10 LH employees engaged in pre-speculation by purchasing land in the Gwangmyeong and Siheung districts, designated as 3rd phase new towns, for 10 billion KRW before the official announcement.
Through analysis of land registers, the People's Solidarity for Participatory Democracy and Minbyun found that from April 2018 to June last year, 14 LH employees and their spouses or family members purchased a total of 10 plots covering 23,028㎡ (approximately 7,000 pyeong) for about 10 billion KRW. Approximately 5.8 billion KRW of the purchase funds are estimated to have come from bank loans, with loans concentrated at specific financial institutions, according to the groups. Many of the employees suspected of speculation are reported to belong to the Seoul and Gyeonggi regional headquarters and are currently working there.
As the controversy over their use of insider information for land speculation escalated, on the 3rd, the government announced it would conduct a full investigation to determine whether LH employees engaged in land speculation in other 3rd phase new towns besides Gwangmyeong and Siheung. Ministry of Land, Infrastructure and Transport (MOLIT) employees are also included in the investigation.
Corruption issues related to MOLIT have persisted for some time. According to the Anti-Corruption and Civil Rights Commission in December last year, MOLIT received the lowest grade, 5, in the '2020 Integrity Measurement' of public institutions. At that time, about 20 current and former MOLIT employees were implicated in bribery and entertainment scandals involving construction companies, which contributed to this result.
The news broke less than a week after the government announced the selection of new towns in the Gwangmyeong and Siheung areas, leading to continuous public outrage, including distrust in government policies.
Moreover, some LH employees showed a brazen attitude on the anonymous workplace community 'Blind,' saying, "Is there a law that says LH employees can't invest in real estate?" and "Whether they used insider information for illegal speculation or invested based on their own study is a matter for the courts or prosecutors to decide," further intensifying public criticism.
In this regard, on the 3rd, a petition titled "Strongly Requesting a National Audit on LH Executives and Employees' Speculation in Gwangmyeong and Siheung New Towns" was posted on the Blue House public petition board.
The petitioner stated, "I have believed in the war against speculation, focusing only on the 3rd phase new towns and the homeless, but I am truly disillusioned. Seeing that about 10 people invested 10 billion KRW made me doubt my eyes," adding, "The words justice and fairness feel bitter. I hope this opportunity will uproot such practices in LH and MOLIT. I request an unreserved investigation and a national audit." As of 10 a.m. on the 4th, over 5,300 people had agreed to the petition.
Additionally, online communities such as real estate cafes expressed feelings of disillusionment with comments like, "Ordinary people struggle to own a home, but this is too much," "Let's investigate all past speculation records," "It's like entrusting the country's treasury to merchants," and "Preemption by the wealthy."
At a press conference held on the 2nd at the People's Solidarity for Participatory Democracy in Jongno-gu, Seoul, representatives from the organization disclosed the list of LH Corporation employees suspected of land speculation and the locations of the land in Gwangmyeong and Siheung new towns, related to the public interest audit request concerning alleged prior speculation. Photo by Yonhap News Agency
Regarding this controversy, the People's Solidarity for Participatory Democracy pointed out it as "professional speculation using insider information" and emphasized that a proper internal investigation must be conducted.
Kim Nam-geun, policy committee member of the People's Solidarity for Participatory Democracy, said on MBC Radio's 'Kim Jong-bae's Focus' on the 3rd, "Looking at how LH employees split the land into four parts to receive four housing rights, it appears to be highly professional speculation."
Kim added, "Considering the investment of 10 billion KRW, it seems they had a certain level of confidence in the development," and criticized, "They made a huge investment of as much as 10 billion KRW and engaged in professional real estate speculation by splitting shares, so it can be seen as blatant speculation."
He continued, "If LH regularly investigates real estate registry documents and whether employees have speculated at least once every two or three years, such incidents would be hard to occur," pointing out that LH has been lax not only in supervision but also in internal management.
Additionally, Lee Kang-hoon, executive member of the People's Solidarity for Participatory Democracy's Livelihood Hope Headquarters and a lawyer, said on YTN Radio's 'Lee Dong-hyung's News Face-off,' "I think the number will continue to increase as the investigation proceeds," emphasizing, "Regular measures and supervision are necessary, and disciplinary regulations should be revised to address the corrupt practices that arise."
He further explained, "Article 7 of the Anti-Corruption Act prohibits acquiring property or financial benefits or enabling a third party to acquire them by using secrets learned during work. Violations can result in imprisonment of up to seven years or fines up to 70 million KRW, and confiscation and seizure are possible for offenders and third parties who knowingly acquired the benefits. Also, Article 57 of the Public Housing Act stipulates that employees of public enterprises engaged in public housing projects who use, provide, or disclose information obtained through work for acquisition purposes can be punished with imprisonment of up to five years or fines up to 50 million KRW."
He added, "Punishment regulations are in place. Nevertheless, the fact that such incidents occur indicates a serious ethical problem," criticizing, "Collectively, it seems like a 'two-job club' was formed, with groups of three to five people investing in planned development sites, which is why such things happen."
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