[Sejong=Asia Economy Reporter Son Seon-hee] On the 7th, Hong Nam-ki, Deputy Prime Minister for Economy, held an emergency briefing regarding allegations of land speculation by some employees of Korea Land and Housing Corporation (LH), expressing "deep apologies to the public" and stating, "If real estate speculation is confirmed, we will take measures without tolerance, including requesting investigations and disciplinary actions."
In the public appeal announced that day, in addition to Deputy Prime Minister Hong, Minister of the Interior and Safety Jeon Hae-cheol, Minister of Land, Infrastructure and Transport Byun Chang-heum, Director of the Office for Government Policy Coordination Koo Yun-cheol, and Commissioner of the National Tax Service Kim Dae-ji were also listed.
Below is the full text of the announcement
[Full Text]
Dear respected citizens,
Today, more than ever,
I stand here with a heavy heart.
Housing is the foundation of our lives,
and I fully understand the public’s desire for a ‘home they want to live in.’
Accordingly, the government has been striving to stabilize the real estate market through “expanding housing supply, protecting actual demand, and blocking speculative demand.”
Furthermore, we have firmly dealt with ‘real estate market disruption acts’ that undermine the strong order of our community.
However, recently, in the public institution that executes real estate policies on the ground,
which should be the most fair and strict with itself,
an unfortunate incident has occurred, leaving me deeply distressed.
As the minister responsible for the economy and comprehensive management of public institutions,
I sincerely apologize to the public with a heavy heart.
【Response to LH Employee Speculation Allegations】: Three Promises
The government takes this incident very seriously.
If the public sector loses trust due to behavioral deviations, policy trust can be shaken, so the responsibility for such deviations is very heavy.
Even if painful, we will boldly remove what must be excised.
We believe this is the minimum duty and obligation to empathize with the wounded hearts of the people.
The government promises the following three things.
First, a joint government investigation regarding this incident is underway. If real estate speculation is confirmed,
we will take measures without tolerance, including requesting investigations and disciplinary actions.
Any form of using public office for private gain
will never be tolerated.
Both the public service community and public officials must take this incident as a solemn opportunity to deeply accept the wounds of the people.
Second, based on this incident, we will systematically prepare not only prevention measures against deviations but also fundamental recurrence prevention measures.
Employees of ministries and agencies related to land development and housing work will, in principle, be restricted from land transactions within a certain scope,
and unavoidable land transactions will be required to be reported.
In addition, as part of strengthening internal controls, we will consider introducing a real estate registration system and other systems for continuous monitoring.
Third, we will fundamentally block individual motives for deviations,
and in case of serious deviations,
we will also consider strengthening the management responsibility of the entire institution.
Illegally obtained profits will be recovered without fail,
so that such attempts can never take root again.
Furthermore, to raise awareness and self-purification efforts among all members,
we will operate the public institution management evaluation system more strictly, including strengthening evaluations on ethical management and fair management.
【Unwavering Real Estate Policy】: Three Actions
Dear respected citizens,
As mentioned earlier, housing is the foundation of life, and
the ‘hope for better housing’ is in the hearts of all citizens.
Therefore, the supply of good housing and the stabilization of the real estate market
are the most important and top priority livelihood policies.
It is important to each and every one of us, but especially for young people starting work, marriage, and social life, and
for the generations of our children.
This is why the government has prepared more measures in real estate policy than in any other field and has devoted all policy capabilities to this.
Since the announcement of the “2.4 3080+ Housing Supply Plan,”
the upward trend in sales and jeonse prices has somewhat eased.
The real estate market now stands at a critical juncture between stabilization and returning to instability.
I am saddened and fearful that this incident might damage the government’s policy will and sincerity,
which have been devoted to stabilizing the real estate market.
The real estate market must not be shaken again.
To prevent the trust in real estate policy from being damaged,
the government will proceed consistently without any wavering.
With the mindset of ‘advancing one step further on the hundred-foot pole’ (Baekcheokgantu Jinilbu, 百尺竿頭 進一步),
we will faithfully implement the following three real estate policy actions.
First, the housing supply plans, including the 2.4 supply plan to provide 830,000 homes, will be carried out as scheduled.
In March, we plan to disclose the selected candidate sites for the 2.4 supply plan, which were selected through consultations with the private sector and local governments, as well as the second public redevelopment candidate sites under the August 4 plan.
In April, we will announce the locations for the second new public housing sites,
and we will make thorough preparations to prevent speculation concerns.
In June, we will begin recruiting tenants for public jeonse housing newly introduced in the November jeonse plan last year.
In July, we will start the pre-subscription for the 3rd new towns, which the public has been eagerly awaiting.
Additionally, candidate sites for urban public housing complex projects to be promoted this year under the 2.4 plan will also be announced.
We will carefully check and manage all these processes until confidence in expanding housing supply is firmly established.
Second, we will eradicate serious market disruption acts that disturb the real estate market on this occasion.
The great disappointment of the public regarding this incident
is believed to be an expression of emotions against illegal, unfair, and improper acts in the real estate market.
Above all, we will root out the following “four major market disruption acts” based on illegal, unfair, and improper acts.
That is, ① Speculation using undisclosed and internal information illegally and unfairly,
② Collusion and price manipulation acts threatening real estate transaction order,
③ Illegal brokerage and disruption acts such as false listings and contract cancellations after record-high prices,
④ Illegal resale and unfair subscription acts that deprive opportunities for home ownership.
We will also consider imposing aggravated penalties for these four disruption acts.
To this end, we will first recover unjust profits,
and by referring to punishments for unfair acts under the Capital Markets Act,
we will negotiate to recover more than the profits gained from criminal acts.
Also, illegal actors will be removed from the market as much as possible.
We will restrict employment in related institutions to some extent, corresponding to the Act on the Aggravated Punishment of Specific Economic Crimes,
and restrict the acquisition of permits and licenses in real estate-related industries,
so that they cannot take root in the real estate market.
Furthermore, regarding the 3rd new towns,
if speculation is confirmed,
we will investigate sources of funds, tax evasion, compliance with loan regulations, etc.
Detailed measures to prevent market disruption will be promptly reviewed at future meetings of related ministers monitoring the real estate market,
and will be intensively discussed at the related ministers’ meeting this Wednesday (March 10).
Third, trust in policy comes from implementation.
Therefore, we will significantly strengthen the ‘execution power’ of real estate policy going forward.
We will regularly and more meticulously check follow-up measures until the ongoing supply plans are firmly established on a normal track.
We will also faithfully fulfill our obligation to explain.
Every two weeks, we will provide detailed explanations of follow-up progress to the public through various methods.
For the public to evaluate the results as ‘tangible,’
prompt legislative support from the National Assembly is also necessary.
Legislation such as the Urban Maintenance Act, Public Housing Special Act, Land Compensation Act for expanding housing supply, and the Real Estate Transaction Act for establishing transparent and fair transaction order
must be enacted as soon as possible for us and for future generations, our children.
We request that these be smoothly processed in the March National Assembly session.
【Closing Remarks】
To the citizens already exhausted by COVID-19,
this LH employee incident adds to your frustration,
making this moment truly heavy and regrettable.
However, I will deeply engrave today’s regret in my heart.
There can be no repetition of mistakes and wrongdoings.
We will definitely resolve the wrongs and move forward.
Because only then can we expect a better tomorrow than today.
There is an old saying, ‘Do not be stingy in correcting faults (Gaegwabullin, 改過不吝).’
The government will not hesitate to correct these faults this time.
If it is individual deviation, we will punish severely,
and if it is confirmed as a structural problem, we will devote ourselves to establishing a systemic prevention structure.
Because we believe this is the way to empathize with the wounded hearts of the people
and for the public sector to regain trust.
As mentioned earlier,
while healing the wrongs and wounds,
the government will consistently uphold and implement the basic principles, directions, and detailed measures of real estate policy without wavering.
Through this, we will remove illegal, unfair, and improper acts,
allow the real estate market to function normally according to market supply and demand,
and ensure that the real estate market stabilization trend is firmly maintained.
We earnestly ask the public to trust the government and real estate policy and to join forces.
The government will mobilize all policy capabilities without hesitation
to stabilize the real estate market and public housing.
Thank you.
- Hong Nam-ki, Deputy Prime Minister for Economy and Minister of Strategy and Finance; Jeon Hae-cheol, Minister of the Interior and Safety; Byun Chang-heum, Minister of Land, Infrastructure and Transport; Koo Yun-cheol, Director of the Office for Government Policy Coordination; Kim Dae-ji, Commissioner of the National Tax Service
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