Investigation of 7 Seoul Regional Housing Cooperatives Reveals 94 Cases of Irregularities

Obstruction and Avoidance of Surveys, Improper Information Disclosure, etc.
17 Cases Reported, 4 Cases Subject to Fines
Administrative Measures Planned if Corrections Not Made After Guidance

# Area A Housing Association is required to prepare an annual fund management plan and monthly fund inflow and outflow statements quarterly by business year and disclose them to its members. It has been confirmed that this association did not prepare or disclose the monthly fund inflow and outflow statements.

# Area B Housing Association is required to hold an annual general meeting within three months after the end of each fiscal year, but it was revealed that the meeting was delayed or not held. The promoters of this housing association must decide on the termination of the housing association’s business through a general meeting if the housing association establishment approval is not obtained by the day two years after the date the member recruitment report was accepted, but they have not held the meeting.

As a result of a joint expert fact-finding investigation conducted by Seoul City on seven areas where local housing association projects are being promoted, about 100 cases of irregularities were uncovered.

On the 4th, Seoul City announced that it will begin administrative guidance measures targeting seven associations where irregularities were detected in the first half local housing association fact-finding investigation.

The investigation results on the associations revealed concentrated violations such as △obstruction or avoidance of the fact-finding investigation △improper disclosure of information such as fund management plans △major decisions made without general meeting resolutions △opaque fund execution and accounting document preparation.

The local housing association project refers to a business where an association is formed by recruiting members without securing ownership of the planned project site, funds are raised from members to acquire ownership of the land, project approval is obtained, and housing is built and supplied to the members.

Currently, 118 local housing association projects are underway in Seoul. Seoul City investigated seven associations in June and July and plans to conduct a full survey in the second half of the year.

In this investigation, Association A was found not to have disclosed the mandatory fund management and inflow/outflow statements. Also, Association B, which did not receive housing association establishment approval, failed to hold a general meeting to decide on the termination of the project. Association C obstructed and avoided the fact-finding investigation by not submitting necessary documents for reviewing association operations.

Among the 94 cases detected this time, 17 cases involving obstruction or avoidance of the investigation and improper information disclosure are subject to prosecution, and 4 cases involving improper fund trust and failure to submit annual fund management plans are subject to fines. If not corrected after a certain guidance period, administrative actions will be taken according to regulations.

Administrative guidance cases will also be continuously monitored after the guidance period, and if not corrected, strict administrative actions such as prosecution will be taken according to relevant laws. The city plans to impose fines and prosecute associations that were re-criticized for not implementing last year’s pointed issues in accordance with the Housing Act and related regulations.

The fact-finding investigation details can be checked on the Jeongbi Project Information Mongttang website and the respective district office websites for each project site. The city plans to require associations to disclose detailed pointed issues to association members through their websites and to submit disclosure performance reports.

Han Byung-yong, Director of the Seoul City Housing Office, said, "Since last year, we have been conducting intensive investigations to ensure transparent operation of local housing associations, so we expect gradual improvement in association management and business conditions. We will continue to conduct full surveys in the second half of this year to correct irregularities so that no members suffer damages from local housing associations anymore."