Enhanced Penalties Specified for Speculation Cases
Ruling Party Includes Up to 5x Fines
Kim Tae-nyeon: "Top Priority for Processing"
[Asia Economy Reporters Koo Chae-eun, Jang Se-hee] The ruling party and government are launching an all-out legislative effort to address the land speculation allegations stemming from Korea Land and Housing Corporation (LH), including enhanced penalties, confiscation of speculative profits up to five times the amount, and retroactive application. The LH scandal is a highly sensitive issue that has struck a nerve with public sentiment, as it combines two flashpoints: 'real estate speculation + public officials' moral hazard.' This has accelerated the ruling party and government's efforts to contain the situation ahead of the April 7 by-elections.
First, the government plans to specify enhanced penalties in the law if LH employees' land purchases are proven to be speculative. To this end, it plans to include these provisions in the "Real Estate Transaction and Real Estate Service Industry Act (Real Estate Transaction Act)" proposed by Democratic Party lawmaker Jin Sung-jun in November last year. A government official said on the 8th, "Since there is no law stipulating enhanced penalties, we are discussing adding some provisions to the market disruption section of the Real Estate Transaction Act."
Enhanced penalties are expected to specifically include recovery of unjust profits, restrictions on employment in related institutions, and limitations on obtaining licenses for real estate-related businesses. The real estate registration system announced by the government the day before is also expected to require public officials to report assets including those of their spouses and direct lineal relatives.
The ruling party is also proposing bills that include imposing fines up to five times the speculative profits and strengthening confiscation and penalties for lawmakers who gain speculative profits. Democratic Party lawmaker Moon Jin-seok proposed an amendment to the "Special Act on Public Housing" that punishes public institution employees such as those at LH with imprisonment of one year or more and fines three to five times the speculative profits for leaking information. Another Democratic Party lawmaker, Jang Kyung-tae, also proposed an amendment to strengthen penalties with imprisonment of up to 10 years or fines up to 100 million won. On the same day, Democratic Party floor leader Kim Tae-nyeon said at the Central Election Committee meeting, "We will promptly review bills that impose fines three to five times on public officials' speculative profits, similar to financial crimes, and push them as the top priority bills in the March National Assembly session."
The "Public Officials Conflict of Interest Prevention Act" proposed by the Anti-Corruption and Civil Rights Commission in June last year is also expected to be merged and reviewed together with these bills. The commission's proposal centers on confiscating and recovering profits obtained by public officials using confidential information in their duties and requiring prior reporting of related transactions. Notably, the scope of application is expanded not only to public officials such as LH and Ministry of Land, Infrastructure and Transport employees but also to elected officials including lawmakers and local government heads. Yang Hyang-ja, a Supreme Council member of the Democratic Party, said in a phone interview with Asia Economy, "We will review the details of the commission's proposal to ensure speculative profits can be recovered and consider retroactive application if necessary," adding, "We will proceed with discussions swiftly to make the most appropriate proposal the party's official stance."
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