[Exclusive] Ministry of Land and Seoul City Launch Joint Investigation into Eunma Apartment Reconstruction Promotion Committee

Focused Inspection on Long-term Repair Reserves and Promotion Committee Operation Legality
Won Hee-ryong: "Judicial Measures Will Be Taken Against Illegal Acts" Strong Stance

On the 23rd, Won Hee-ryong, Minister of Land, Infrastructure and Transport, stated at a meeting with residents of Eunma Apartment held at the Gangnam District Residents' Hall, "If acts that infringe upon and obstruct the public interest continue, such as baseless unilateral claims or inciting residents, administrative investigations or judicial measures will be taken."

The Ministry of Land, Infrastructure and Transport and the Seoul Metropolitan Government are launching an administrative investigation into the Eunma Apartment Reconstruction Promotion Committee in Gangnam-gu, Seoul. This is the first time since the committee's establishment in 2002 that it will undergo a joint investigation by the Ministry and Seoul city.

According to government and industry sources on the 29th, the Ministry and Seoul city plan to focus on examining the legality of the Eunma Apartment Reconstruction Promotion Committee’s operations and issues such as the misuse of the long-term repair reserve fund through the joint inspection. The long-term repair reserve fund is a special management fee collected and accumulated from owners in accordance with the Apartment Housing Management Act to prepare for the replacement and repair of major facilities in apartment complexes.

Eunma Apartment recently decided to proceed with exterior painting and rooftop waterproofing paint work. Although it was explained as a measure to address cracks and leaks on the exterior walls of the complex, which is in its 43rd year since completion, and to improve aesthetics, some residents questioned, "Why are they painting when the complex is waiting for reconstruction?" There were allegations that the intent was to deplete the long-term repair reserve fund, which is accounted for in the apartment housing finances. The long-term repair reserve fund must be returned to residents if the complex is demolished or dismantled due to reconstruction.

Last year, the issue of waste disposal in the basement of Eunma Apartment also became controversial. Approximately 2,300 tons of waste were handled, costing about 350 million KRW. At that time, some residents raised suspicions of corruption, claiming that the disposal costs were excessively estimated.

This administrative investigation follows shortly after Minister Won Hee-ryong of the Ministry of Land, Infrastructure and Transport met with Eunma Apartment residents and expressed a tough stance. During a meeting with residents of Eunma Apartment in Gangnam-gu, Seoul, who demanded a reroute of the metropolitan area express railroad (GTX)-C line, Minister Won said, "If unfounded claims infringe on public interest, we will not hesitate to take legal action."

Minister Won specifically stated, "We will take all possible measures that the Ministry can exercise, including administrative investigation authority, against those who, holding only one ten-thousandth of a household’s share, lead efforts to manipulate national projects and engage in illegal acts using public funds."

In reconstruction projects where speed is crucial, it is not uncommon to recruit ‘star union heads’ with experience elsewhere by giving them a small share and bringing them in as union executives to expedite progress. However, this process sometimes leads to problems such as inciting residents or allegations of embezzlement of public funds.

Minister Won’s remarks are also interpreted as pointing out these issues. A Ministry official said, "We plan to examine whether the Eunma Reconstruction Promotion Committee is operating legally," adding, "We will also look into whether the long-term repair reserve fund is being used for its intended purpose."

Meanwhile, various measures to enhance transparency in union operations are being pursued in the National Assembly. These include a bill (proposed by Yook Kyung-jun of the People Power Party) to prevent external ‘star union heads’ holding less than 1% shares from being invited as promotion committee heads or executives to obstruct reconstruction or redevelopment; the ‘Dojeong Act Amendment’ (proposed by Park Soo-young of the People Power Party) to strengthen requirements for convening and dismissing general meetings; and a bill to strengthen regulations on the election of union executives, led by Lee Byung-hoon of the Democratic Party, all of which are being discussed in the Land, Infrastructure and Transport Committee’s bill review subcommittee.