LH In-House Messenger Content Revealed
"Significant Use of Nominee Speculation Within Company... Atmosphere Not Unusual"
Government "Thorough Investigation of Nominee Transaction Activities"
On the 4th, a metal fence was installed along the land near the recycling facility in Gwarim-dong, Siheung-si, Gyeonggi-do, where allegations of speculation by LH employees were raised. / Photo by Yonhap News
[Asia Economy Reporter Lim Juhyung] It has come to light that an employee of Korea Land and Housing Corporation (LH) revealed plans to purchase land under a borrowed name through the company messenger and mentioned that "even if I get fired, the land profits will exceed my lifetime salary." This has raised growing concerns that LH employees may be widely engaging in speculation using internal information. The government announced that it will establish a special investigation headquarters involving the National Tax Service and the Financial Services Commission to thoroughly investigate allegations of speculation under borrowed names.
On the 8th, JTBC reported that it obtained conversation records in which an LH employee explained his illegal speculation plans via the company messenger.
According to the message content, Mr. A, who joined LH as a new employee last year and worked in the Land Sales Department of the Daegu-Gyeongbuk Regional Headquarters, said, "Daegu Yeonho District will definitely rise, so I am preparing joint investments by pooling money with my older brother's friends." This is interpreted as a statement indicating an intention to purchase land under someone else's name by gathering investment funds with acquaintances.
Since LH employees cannot purchase LH-owned land under their own or family members' names, they need names other than immediate family members to buy such land. In particular, the Daegu Yeonho District mentioned by Mr. A in the messenger was designated as a public housing district in 2018, and LH employees were prohibited from purchasing land there. This has led to criticism that Mr. A might be attempting illegal speculation by using internal information obtained while working as a sales department employee.
Mr. A also explained the reason for attempting such speculation in violation of employment rules by saying, "Even if I get fired for this, the land profits will be much greater than what I would earn from the company over my lifetime."
JTBC reported on the 8th that an LH employee expressed the intention to purchase LH-owned land under a borrowed name through the company messenger. / Photo by JTBC Broadcast Capture
Mr. B, an LH employee who reported the conversation to JTBC, claimed, "Speculation under borrowed names or pre-speculation is quite common secretly within the company. It is not unusual at all," and added, "There are many employees who speculate under borrowed names of acquaintances rather than family members."
However, Mr. A, who was accused of illegal speculation, fully denied the allegations to JTBC, saying, "It was a joke, and I have never traded land in Yeonho District."
There have also been calls to investigate cases of borrowed-name investments near new towns rather than in the planned new town sites themselves.
Another whistleblower, LH employee Mr. C, emphasized, "Only new towns get attention, but in fact, few employees directly invest in new towns," and added, "There are many cases of land purchased under borrowed names near new towns, and this is what should actually be investigated."
Prime Minister Chung Sye-kyun is receiving a report on the investigation of allegations of speculative investment in new towns by employees of the Korea Land and Housing Corporation (LH) from Nam Gu-jun, who was appointed as the first head of the National Investigation Headquarters, at his office in the Government Seoul Office Building on the 8th. / Photo by Yonhap News
Meanwhile, the government has ordered a thorough investigation into the 3rd new town pre-speculation allegations involving LH employees, including transactions under borrowed names.
On the 8th, Prime Minister Chung Sye-kyun, while receiving a report on the 'Special Investigation Unit Operation Plan for Real Estate Speculation' from Nam Gu-jun, head of the National Investigation Headquarters, at the Government Seoul Office, instructed the establishment of a government joint special investigation headquarters for the LH speculation allegations.
Prime Minister Chung said, "Expand and reorganize the special investigation unit currently established at the National Investigation Headquarters into a government joint special investigation headquarters involving related agencies such as the National Tax Service and the Financial Services Commission, and thoroughly investigate all illegal and illicit speculative activities such as borrowed-name transactions in development areas," emphasizing, "The existing joint investigation team lacks authority to investigate or prosecute private parties, so there are limitations in uncovering illegal acts such as borrowed-name transactions and unregistered resale."
He further instructed, "Conduct a swift and thorough investigation so that not a shred of suspicion remains," and added, "We must prevent any real estate market disruption activities from gaining a foothold."
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