City Promised “30% Land Cost Support” to Ungcheon Industrial Complex Tenant,
Then Notified of ‘Changed Criteria’ After Completion
Officials’ Remarks Spark Controversy: “That’s... well, yes”
Allegations have emerged that Boryeong City in South Chungcheong Province lured companies with promises of subsidy support during the sale of industrial complex lots, only to renege on those promises after factory completion, causing losses amounting to hundreds of millions of won.
With the release of a recorded call in which a city official admits, "The criteria have changed," effectively acknowledging the change, trust in the local administration is being fundamentally shaken.
According to an Asia Economy report on October 9, Company A, a dried seafood manufacturing and export business based in Seoul, purchased land in the Ungcheon General Industrial Complex in 2021 at the suggestion of Boryeong City and invested 9 billion won to build a new factory.
At the time, the city actively encouraged the company’s relocation, promising, "We will provide subsidies covering 30% of the land purchase cost and 14% of the equipment investment." Trusting this commitment, the company established a financial plan and carried out a large-scale investment.
However, after the factory was completed, the city abruptly changed the subsidy calculation criteria and notified the company that it would only pay about one-third of the originally promised amount.
As a result, the company’s financial plan collapsed, and it was left shouldering losses in the hundreds of millions of won.
A recorded call obtained by Asia Economy between a company employee and a city hall official contains remarks in which the official acknowledges the change, stating, "The criteria have changed."
When a Company A representative protested, "At the time of the contract, we were clearly told about the 30% support, but now you’re saying 'within five times the area of the existing factory'? That doesn’t make sense," the official replied, "That’s... well, yes."
Another official avoided answering when asked, "Isn’t this a case of fraudulent sales?" by saying, "It’s difficult for me to respond."
In particular, the team leader in charge of attracting companies at the time also stated, "The amount was reduced according to South Chungcheong Province’s criteria," and admitted, "It’s true that the details are different from what we initially informed you."
The company criticized, "We invested based on Boryeong City’s commitment, but they changed the criteria just before payment, causing hundreds of millions of won to disappear. This is clearly deceptive administration."
They further pointed out, "The ordinance clearly states 'support within 40% of the land purchase cost,' but the city later introduced the 'within five times the existing factory area' provision, which is a clear breach of promise."
Currently, Company A has filed a national compensation lawsuit against Boryeong City, seeking 740 million won in damages.
A company representative appealed, "Our credit and finances collapsed because we trusted the administrative agency. We never expected local government administration to be this opaque."
A city official stated, "Since the matter is currently in litigation, we will await the court’s decision."
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