"Did Not Know Spouse Was Alive"…LH Employees Caught in Internal Audit 'Deny'

'Alio' LH Audit Result Disposition Request
Violation of Employment Regulations and Rights and Obligations Succession Contract
Purchased Housing from LH and Also Omitted Reporting

On the morning of the 4th, people are moving at the headquarters of Korea Land and Housing Corporation (LH) in Chungmugong-dong, Jinju-si, Gyeongnam. / Photo by Yonhap News

[Asia Economy Reporter Lim Ju-hyung] Amid allegations of land speculation involving some employees of Korea Land and Housing Corporation (LH) in the 3rd New Towns such as Gwangmyeong and Siheung, it has been revealed that some LH employees engaged in real estate transactions violating employment regulations even during internal audits, yet only received light disciplinary actions. The employees caught in the internal audit reportedly explained that they were unaware because "it was done by family members."

According to the LH "Audit Result Disposition Request" disclosed on the public institution management information disclosure system (Alio) on the 8th, the spouse, spouse's mother, and two children of Mr. A, who was the head of the Gyeonggi Regional Headquarters in January 2018, jointly signed a sales contract and rights and obligations succession contract for a 265㎡ relocation site supplied by the Gyeonggi Headquarters to original residents.

According to LH employment regulations, employees and their spouses, parents, and children are prohibited from entering into rights and obligations succession contracts for specially supplied housing related to compensation and relocation.

When this fact was revealed during the audit, Mr. A explained, "I knew that my spouse's mother was purchasing the relocation site, but I did not know that my spouse and children were purchasing it jointly," adding, "Since I was working in a provincial office, I only found out about the inclusion of the contract parties about a week after the contract."

A similar case occurred in Incheon.

The spouse of Mr. B, deputy head of the Incheon Regional Headquarters, was also found in the audit to have signed a sales and rights and obligations succession contract with the allottee for a 323㎡ negotiated transfer site provided by LH to the negotiated transferor in November 2017.

Regarding this, Mr. B stated, "I only found out about the purchase after receiving a call from the auditor and confirming with my spouse," explaining, "Since my spouse also works, we do not disclose our financial matters to each other and handle economic activities such as tax payments and loan repayments independently."

The audit office pointed out that both Mr. A and Mr. B had opportunities to be aware of the transaction restrictions under the employment regulations, and even if they were unaware of their spouses' transactions, violating the employment regulation provisions means they did not fulfill their duty of good faith as employees. However, it was reported that only light reprimands were imposed as disciplinary measures.

Amid allegations that LH employees systematically purchased land for the Gwangmyeong·Siheung new town site, saplings have been planted at the suspected land purchased by LH employees in Gwarim-dong, Siheung-si, on the 4th. / Photo by Yonhap News

There were also cases where employees violated regulations by entering into private contracts with LH or purchasing houses from LH without reporting. The employment regulations stipulate that employees and their spouses, parents, and children are, in principle, prohibited from entering into sales or lease contracts for houses with the corporation.

Exceptionally, it is possible to purchase houses after 10 days from the start date of a private contract or to purchase houses by public recruitment announcements through daily newspapers for private contract target houses, with the designation order decided by lottery, and purchase accordingly.

However, in such cases, the purchase must be reported to the head of the audit department within 30 days from the contract date.

The spouse of Mr. C, a manager at the Daegu-Gyeongbuk Regional Headquarters, signed a contract with the corporation for a housing unit on April 7, 2019, before the 10-day period had passed, despite the headquarters announcing on March 13, 2019, that private contracts would be possible from 10 a.m. on April 1, 2019, for remaining units.

Mr. C stated, "I was not aware of the regulation," but received a warning.

In addition, it was found that five people, including a manager at the Jeonbuk Regional Headquarters, purchased houses from LH under their own or their mother’s or spouse’s names through private contracts from February 2019 to January of the following year and failed to report these transactions.

They each received cautionary measures.