Daemyung Construction Attempts to Dominate Jangwi New Town Redevelopment by Splitting Shares... Owner Sent to Prosecution

[Asia Economy Reporter Gong Byung-sun] Fourteen officials from Daemyung General Construction, who attempted to dominate the Jangwi New Town redevelopment project in Seoul by splitting shares, have been handed over to the prosecution.

On the 14th, the Jongam Police Station in Seoul sent 14 company officials, including Daemyung Construction founder Ji Seung-dong and his eldest son Ji Woo-jong, CEO of Daemyung Construction, to the prosecution on charges of violating the Real Estate Real Name Act. Daemyung Construction is a construction company known for its apartment brand 'Luchen'.

They are suspected of splitting real estate shares and registering them under other people's names to inflate the number of friendly union members in the Jangwi New Town redevelopment project. Ji began concentrating on purchasing real estate in the Jangwi 3-dong area of Seongbuk-gu, Seoul, from October 2003. When the area was selected as a redevelopment project site in April 2008, the land was divided into units of 0.1㎡ and buildings into units of 3 to 5㎡. The names of employees, on-site workers, and construction material suppliers were used to register the divided land and buildings. Most of them reportedly signed consent forms after hearing that "if you join the union, you will be given a pre-sale right," without knowing their names were being used for registration.

According to the Act on Maintenance and Improvement of Urban Areas and Dwelling Conditions, even if multiple plots are owned, only one union member is counted when establishing the union. Daemyung Construction is investigated to have increased the number of union members by splitting shares to secure the construction rights for the project and assert various claims.

According to the police, the inflated number of union members reached 211. Out of the total 512 union members, nearly half were created through share splitting. Using this method, Daemyung Construction obtained approval for union establishment from the Seongbuk District Office in May 2019. However, in July, the Seoul High Court ruled to cancel the union establishment, stating in a lawsuit filed by some union members against the Seongbuk District Office that "it is recognized that the application for union establishment approval was made using false union members."