HDC Hyundai Development Company faced its biggest crisis in 23 years since Chairman Chung Mong-gyu took office in 1999, after causing two major construction site safety accidents in Gwangju. Industry insiders expect that Chairman Chung will soon take responsibility for the accidents, issue a public apology, and announce his future plans. The photo shows Chairman Chung Mong-gyu bowing his head during a press conference related to the Gwangju building collapse accident at the Gwangju City Hall briefing room on June 10 last year. HDC Hyundai Development Company has been involved in a series of major construction site accidents, leading to reports that Chung Mong-gyu, chairman of the HDC Group, will take responsibility for the incidents and resign.
On the 16th, HDC Hyundai Development announced, "Chairman Chung is scheduled to make a statement at 10 a.m. on the 17th in the large conference room (9th floor) of the HDC Hyundai Development Yongsan headquarters."
The content of Chairman Chung's statement has not been disclosed, but it is being discussed that he will step down from his position as chairman of Hyundai Development Company, completely withdraw from construction management, and transition the company to a professional management system.
The day after the collapse accident occurred, on the 12th, Chairman Chung visited the disaster site in Gwangju and discussed accident response measures and future plans with Yoo Byung-gyu, CEO of Hyundai Development Company, among others. Afterwards, he returned to his residence in Seoul and spent the weekend contemplating fundamental accident response measures and his own position.
Chairman Chung stepped down as CEO of Hyundai Development Company in 2018 when the group transitioned to a holding company structure, but he still retains the chairman position of Hyundai Development Company and remains involved in management by making decisions on major issues.
Given the seriousness of the situation, there is a strong possibility that Chairman Chung will also resign from his position as CEO and chairman of the holding company HDC, declaring a complete "management withdrawal." Some speculate that the CEO and other executives of Hyundai Development Company may also resign together.
Along with announcing his position, Chairman Chung is expected to promise fundamental safety measures to restore brand trust.
On the 16th, the sixth day since the collapse accident at a newly built apartment in Seo-gu, Gwangju, a crane that will be used for dismantling the tower crane near the accident site is assembled and laid down.
Additionally, there are expectations that he will express his intention to step down from his current position as president of the Korea Football Association. Chairman Chung, who took office as the 52nd president of the Football Association in 2013, successfully secured a third term last January and has held the position for nine years.
Born in 1962, Chairman Chung served as chairman of Hyundai Motor Company from 1986 to 1998. However, after the management rights of Hyundai Motor Company were transferred to Chairman Chung Mong-koo, he moved to Hyundai Development Company in March 1999 along with his late father, the honorary chairman of Hyundai Motor Company, Chung Se-young.
Hyundai Development Company, once known as a prestigious apartment builder, has faced severe criticism for poor construction after causing a large-scale casualty accident during the demolition process in the Gwangju Hakdong redevelopment area last June, followed by the collapse of the exterior wall of the newly built Hwajeong I-Park apartment just seven months later on the 11th.
As public opinion grows demanding stricter sanctions against those responsible for the accidents and Hyundai Development Company, the responsibility of owner Chairman Chung is also increasing.
The impact of this accident threatens the very survival of HDC Hyundai Development Company.
Residents of Hwajeong I-Park in Gwangju are demanding complete demolition and reconstruction, which means the company must immediately prepare for enormous financial losses related to construction costs and compensation, not to mention the incalculable losses due to the decline in corporate trust.
At existing contract sites such as Woonam in Gwangju, demands for contract termination are pouring in, and residents of existing apartments are even attempting to remove the "I-Park" brand from their complex names.
Damage to new orders, including public projects as well as reconstruction and redevelopment projects, is also inevitable.
As public opinion worsens among citizens and labor groups, calls for harsher punishment against Hyundai Development Company are growing louder.
Experts believe that severe disciplinary actions, including suspension of business operations and punishment of those responsible for the accidents, are unavoidable.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
