Three Consecutive Days of 'LH Investigation' Orders by Moon... Blocking Distrust in Real Estate Policy

[Image source=Yonhap News]

[Asia Economy Reporter Lee Ji-eun] President Moon Jae-in has unusually ordered a strict investigation into LH for three consecutive days. This appears to reflect concerns that the LH scandal could potentially undermine trust in the Moon administration's real estate policies.

On the 5th, President Moon instructed that the investigation into allegations of speculation by LH employees in the 3rd New Town development include even Blue House staff members as subjects of the inquiry.

The Blue House has already formulated an investigation plan and begun an internal probe following President Moon's directive, and a related task force (TF) led by Chief Secretary Yoo Young-min has also been activated. Additionally, Minister of Land, Infrastructure and Transport Byun Chang-heum, who served as LH president during the period when speculation is alleged to have occurred, received a separate order to "address the issue with extraordinary awareness and determination."

Previously, on the 3rd and 4th, President Moon also issued directives regarding the LH issue. On the 3rd, he ordered a full-scale investigation, and on the 4th, he instructed that the investigation determine whether there was a deeply rooted corrupt structure behind the New Town speculation allegations or if it was merely individual misconduct. It is unusual for President Moon to issue directives on the same issue for three consecutive days.

Minister of Land, Infrastructure and Transport Byeon Chang-heum is leaving after finishing a briefing on April 4 at the Joint Briefing Room of the Government Seoul Office in Jongno-gu, Seoul, regarding allegations of speculation by employees of Korea Land and Housing Corporation (LH) in the 3rd New Towns including Gwangmyeong and Siheung. Photo by Kim Hyun-min kimhyun81@

The reason President Moon is focusing so intensively on the LH issue appears to be because this scandal is closely linked to the government's credibility in real estate policy. If the 3rd New Town development is halted, modified, or delayed due to the fallout from the LH scandal, the supply of up to one million new housing units could be disrupted, and furthermore, distrust in the public housing policy led by LH itself could spread. Losing momentum in the supply policy being pushed at the end of the administration could cause the real estate market to become volatile once again.

President Moon's instruction to Minister Byun, as a former LH president, to resolve the issue also stems from this reasoning. However, even if the full investigation concludes that the problem was due to "the misconduct of some employees," it is uncertain whether the public, angered by the LH scandal, will accept this explanation at face value. Recently, an LH employee sparked public outrage by posting on an anonymous workplace community app a comment implying "there is no law forbidding LH employees from buying land," and Minister Byun apologized after causing controversy by seemingly defending employees' speculative actions in a media interview, stating, "It was my fault that my remarks appeared to defend LH employees' speculative behavior."