"Invested 100 Million KRW for 6 Million KRW Monthly Profit"…Unlicensed REIT Under Police Investigation

Bareungilitz Engages in Unauthorized Quasi-Deposit Activities
Damage Scale Unknown Due to Overseas Servers

"If you deposit 100 million won, you can earn more than 6 million won in profit every month."

This is a promotional phrase used by 'Bareungil REITs,' which was recently exposed by the Ministry of Land, Infrastructure and Transport and is currently under police investigation. The company claimed to be a REITs (Real Estate Investment Trusts) investing in U.S. real estate, but the reality was different. Under current law, REITs must obtain approval (registration) from the Minister of Land, Infrastructure and Transport to operate, but Bareungil REITs conducted similar unauthorized fundraising activities without following the proper procedures.

'Investment Caution Notice' banner displayed on the Korea REITs Association website / Photo by Korea REITs Association website capture

According to the Ministry of Land, Infrastructure and Transport and the Korea REITs Association on the 16th, the association recently displayed a 'Investment Caution Notice' banner on its website. This was due to cases where Bareungil REITs solicited stock subscriptions without approval, emphasizing the need for special caution regarding unauthorized fundraising activities. When law firms and others began collecting damage cases related to Bareungil REITs online, the Korea Real Estate Agency, which manages and supervises the market, reportedly requested the association to provide guidance.

REITs are indirect real estate investment entities in the form of joint-stock companies that collect funds from multiple investors to invest in and operate real estate and real estate-related securities, returning the profits to investors. To operate, approval from the Minister of Land, Infrastructure and Transport is required.

Bareungil REITs was confirmed not only to have failed to obtain this approval but also to be a non-existent company. The Ministry of Land, Infrastructure and Transport recognized this fact and requested a police investigation in May. Earlier, in April, the association began looking into the matter after receiving a request to verify whether Bareungil REITs had obtained approval.

A Ministry of Land, Infrastructure and Transport official stated, "It appears that Bareungil REITs only recruited investors online," adding, "We organized related information such as the business registration number at that time and submitted it to the police. However, the investigation revealed that this information was stolen."

The investigation into Bareungil REITs is facing difficulties. Even after about five months since the Ministry’s request, it remains unclear who was behind this operation and the extent of the damages. The fact that the server is located overseas is reported to be a major obstacle to the investigation. The website is currently closed.

An association official said, "The term REITs is not commonly used for investment products, but since it is a specialized term, it seems to have been abused in this way," and added, "We strongly recommend verifying whether a REITs is approved by searching for it before investing."