Names Recalled Amid POSCO E&C's Crisis of Expulsion
Only Two Construction Firms Ever Deregistered for Major Industrial Disasters
Sampoong Department Store and Seongsu Bridge: The Worst Man-Made Tragedies in History
Lessons from the Fall of Major Companies: The Importance of Safety and Fundamentals
Recently, as President Lee Jaemyung raised the possibility of revoking (deregistering) the construction license of POSCO E&C following a series of serious industrial accidents, the names of two construction companies that left a significant mark on South Korea’s construction history are being "forcibly recalled." These are the stories of Sampoong Construction and Dong-Ah Construction, companies that once dominated the industry but ultimately fell due to tragic accidents and management failures. These two firms are the only major construction companies to have had their construction licenses revoked due to serious industrial disasters.
The tragedies of Sampoong and Dong-Ah served as stark reminders to the construction industry of the importance of safety and sound management. Both companies share the commonality that license revocation, whether directly or indirectly, accelerated their downfall. Now, as POSCO E&C faces a crisis of potential expulsion from the industry due to repeated safety incidents and management troubles, the histories of Sampoong and Dong-Ah once again underscore the importance of the fundamentals.
A Man-Made Disaster Born of Greed: The Fall of Sampoong Construction
Sampoong Construction thrived in the civil engineering and architectural sectors from the 1960s onward. The Sampoong Department Store, completed in 1989 in Seocho-gu, Seoul, became a landmark of Gangnam and a symbol of the company’s prestige. However, behind this glamour lurked illegal practices and greed that disregarded safety. The building, originally designed for four floors, was recklessly changed to five, and to maximize profits, the distance between columns was reduced?clear violations of design standards that led to widespread shoddy construction.
On June 29, 1995, all this greed culminated in an irreversible tragedy. The Sampoong Department Store collapsed in an instant, resulting in over 1,400 casualties. This was not a simple accident but an unmistakable man-made disaster. In the aftermath, Sampoong Construction became the first company in the industry to have its construction license revoked due to a major accident. The company went out of business in 1997 and disappeared into history, but its name remains synonymous with "shoddy construction" and "disregard for safety."
The Tragedy of Shoddy Construction and Ambition: The Fall of Dong-Ah Construction
The downfall of Dong-Ah Construction was the result of two overlapping tragedies: the catastrophic Seongsu Bridge collapse and excessive ambition. Dong-Ah Construction, hailed as the "king of construction" for leading the Middle East construction boom in the 1970s and 1980s, established itself as a global company by undertaking the Great Man-Made River project in Libya starting in 1983. From 1965 to 1999, Dong-Ah ranked within the top five in construction capability evaluations 34 times out of 35, standing shoulder to shoulder with major firms such as Hyundai, Daewoo Construction, and DL E&C (then Daelim Industrial).
However, that glory was short-lived. On October 21, 1994, the Seongsu Bridge, constructed by Dong-Ah, collapsed. The accident claimed the lives of 32 citizens, and the shock and anger of the public soared. Dong-Ah Construction, held responsible for shoddy construction, had its construction license revoked in 1997 and lost all public trust.
To make matters worse, excessive ambition in the Libya project led to massive debt, and the Asian financial crisis pushed the company to the brink. Ultimately, Dong-Ah Construction went bankrupt and was dismantled in 2000. The dream of the "king of construction," who once claimed he could "lift the earth," was shattered by a combination of construction disasters and management failures. Today, the company survives under the SM Group, but its former glory has not been restored. This year, SM Dong-Ah Construction ranks 88th in construction capability evaluations.
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