"Preferential Treatment for LH Officials in Purchase Rental Management"... CEO Lee Han-jun "Will Clearly Address" [2024 National Audit]

"Surprised to Hear the Criticism... Could Not Check"
Improvement Plan for Selection Criteria Created, Correction Notice Issued

Suspicions have been raised that there is a 'jeongwan privilege' in the management service project for purchase rental housing by the Korea Land and Housing Corporation (LH), in addition to design and supervision.

Lee Han-jun, President of Korea Land and Housing Corporation (LH), is responding to questions at the National Assembly's Land, Infrastructure and Transport Committee's audit held on the morning of the 10th. / Photo by Yonhap News

On the 10th, Lee Chun-seok, a member of the Democratic Party of Korea, stated at the National Assembly's Land, Infrastructure and Transport Committee audit, "In the 2022-2024 purchase rental consignment management service bidding, two companies swept 80% of the total contract amount, and former LH officials are currently employed there."

The LH purchase rental project is a representative project of LH that purchases existing multi-family houses and other dwellings in urban areas and provides them to basic livelihood security recipients at rents lower than market prices. Currently, specialized consignment companies manage the project in 54 regions nationwide.

According to the data disclosed by Rep. Lee, among 54 service contracts over three years, Company A won 27 contracts (68.9 billion KRW), and Company B won 15 contracts (32 billion KRW), totaling 42 contracts. In terms of contract amounts, Company A and B secured 68.9 billion KRW and 32 billion KRW respectively, accounting for about 80% (100.9 billion KRW) of the total 125.6 billion KRW contracts.

Rep. Lee said, "I looked into how 80% was possible and found that retired LH officials were all at Companies A and B," adding, "There are four former officials including one retired LH Grade 2 or higher at Company A, and eight employees including three Grade 2 or higher retired officials at Company B." Among them is a former official who retired as a Grade 1 director after serving as the head of the Housing Welfare Headquarters, which oversees the purchase rental project.

Regarding this, LH President Lee Han-jun responded, "I was surprised to hear this criticism during the audit. We had not checked this part," and added, "Until now, we only knew about jeongwan issues related to construction and permits, but I was very surprised to hear it extends to purchase rental as well." He further stated, "We will definitely resolve this issue. We will prepare improvement plans regarding the criteria and methods for selecting companies and correct this immediately."