HUG Records Deficit for Three Consecutive Years, 2.5 Trillion Won Last Year
The Only Institution Recommended for Dismissal in Ministry of Economy and Finance Evaluation
Second Resignation of a Ministry of Land, Infrastructure and Transport Affiliate Head Following SR
Byungtae Yoo, President of the Housing and Urban Guarantee Corporation (HUG), has voluntarily resigned after receiving a failing grade of "D" (Inadequate) for two consecutive years in the management evaluation.
Byungtae Yoo, President of the Housing and Urban Guarantee Corporation, is responding to a lawmaker's question at the National Assembly's Land, Infrastructure and Transport Committee audit held on the 19th. Photo by Hyunmin Kim kimhyun81@
According to HUG and the Ministry of Land, Infrastructure and Transport on the 24th, President Yoo officially conveyed his intention to resign to the ministry the previous day. Yoo, who took office in June 2023, is stepping down after about two years in the position. He is resigning with one year remaining before his term was set to expire in June next year.
The Ministry of Economy and Finance manages the heads of public institutions through an annual evaluation of management performance. Any institution head who receives a grade of "D" (Inadequate) or lower for two consecutive years becomes subject to a recommendation for dismissal. This year, Yoo met this condition and received a dismissal recommendation. HUG received a "D grade" for both 2023 and 2024, making it the only institution to be mentioned for dismissal in this year's management evaluation. The management evaluation uses a six-level grading system: S (Excellent), A (Outstanding), B (Good), C (Average), D (Inadequate), and E (Very Inadequate).
HUG's poor management performance is directly linked to a surge in substitute payments due to jeonse fraud. Since 2022, there has been a sharp increase in incidents involving the return guarantee of jeonse deposits, which has rapidly deteriorated HUG's financial soundness. Last year, the amount of substitute payments for return guarantees reached 4.4896 trillion won, and net losses amounted to 2.5198 trillion won, marking a deficit for the third consecutive year. In addition, some analysts point out that external factors such as falling housing prices and market volatility have contributed to HUG's increased losses. In particular, a slump in the real estate market and declining profitability of the Housing and Urban Fund have led to a structurally deficit situation.
From the beginning of his appointment, President Yoo faced controversy over being a "parachute" appointment due to his connections with government officials. More recently, suspicions of preferential loans for internal employees further fueled criticism of his management leadership. As the recommendation for dismissal became more likely under these circumstances, Yoo appears to have taken the step of offering his resignation to the Ministry of Land, Infrastructure and Transport in advance, effectively following the process of an "honorable retirement."
This is the second resignation of an institution head under the Ministry of Land, Infrastructure and Transport following the announcement of the Ministry of Economy and Finance's management evaluation. Previously, Jongguk Lee, President of SR, also decided to resign voluntarily on the 20th. SR received a D grade, which was lower than the previous year's C grade.
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