Intensive Investigation Targeting 118 Cooperatives
Investigation Period Extended and Expert Team Reinforced
Immediate Administrative Action for Cooperatives with Multiple Violations
The investigation will target housing cooperatives that have engaged in false or exaggerated advertising, used project funds for personal purposes, or entered into contracts that could harm cooperative members.
The Seoul Metropolitan Government announced on May 20 that it will launch a rigorous, comprehensive investigation into 118 regional housing cooperatives from next month through October. To ensure a thorough investigation, the city will extend the investigation period from the previous four months to five months and will reinforce its team with experts in urban and housing administration.
The city will conduct proactive inspections of cooperatives showing signs of fraudulent activity. After analyzing 452 cases of damage consultations received by the Seoul Damage Consultation Support Center since August last year, the city will select cooperatives with multiple complaints for a "joint investigation by city and district experts."
Post-investigation monitoring will also be conducted to enable swift administrative action based on the investigation results. In cases where embezzlement or breach of trust is suspected, the city will request a criminal investigation. If a cooperative obstructs or refuses the fact-finding investigation, the city will provide guidance for a certain period, and if the cooperative still fails to cooperate, it will be reported to the authorities. Cooperatives found to have committed the same violation more than twice will be subject to immediate administrative penalties, such as fines or prosecution, without prior notice.
In the previous comprehensive investigation last year, 618 violations were uncovered. There were 42 cases reported to the authorities for insufficient information disclosure and improper performance reports, and 11 cases where fines were imposed for submitting inappropriate membership contracts or failing to submit annual fund management plans. For cooperatives that made major decisions without a general meeting resolution or used business promotion expenses inappropriately, there were 454 cases of administrative guidance and 111 cases of corrective orders issued.
The city announced that, through this fact-finding investigation, it intends to diagnose the operational methods of regional housing cooperatives and improve related systems. At the recruitment reporting stage, where the incidence of problems is high, the city plans to expand the application of mandatory requirements under the Housing Act. For cooperatives that have made no business progress for an extended period even after the expiration of the sunset deadline, a new provision will be established allowing the district mayor to dissolve the cooperative ex officio. The city has also proposed to the Ministry of Land, Infrastructure and Transport to enact legislation for the fact-finding investigation of regional housing cooperatives and to disclose the investigation results to cooperative members. Additional proposals will be made regarding the establishment of standards for electronic voting at general meetings and for handling contract-related tasks.
Choi Jinseok, head of the Seoul Housing Policy Division, stated, "We will strengthen fact-finding investigations and post-investigation monitoring, and pursue institutional improvements to ensure transparent operation of regional housing cooperatives and prevent harm to cooperative members." He added, "We will actively implement Seoul-style management measures for regional housing cooperatives and do our utmost to protect members' rights and promote fair project execution."
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