Focused Investigation Conducted at Three Project Sites
12 Cases Referred for Criminal Investigation, 12 Cases Filed for Criminal Complaints
The Seoul Metropolitan Government announced on December 5 that, after conducting a joint investigation with experts into three local housing cooperatives where violations related to cooperative corruption were identified, it has uncovered additional cases of wrongdoing. The city plans to take strong administrative measures against these cooperatives, including referring them for criminal investigation.
From May to October, the city conducted a comprehensive inspection and detected 550 cases of violations of the Housing Act and serious cooperative corruption at 118 project sites. Subsequently, a focused investigation into three project sites was carried out until November 14, resulting in the identification of a total of 65 improper cases.
The additional investigation revealed numerous cases undermining the transparency of cooperative operations, such as cooperative chairpersons using project funds for personal purposes or excessively signing service contracts. The main types of violations included improper execution of cooperative funds, excessive payments for service contracts leading to suspicions of breach of trust and embezzlement, making major decisions without general assembly approval, and unqualified business agents.
Of the 65 cases identified, the city referred 12 serious violations, such as excessive payments for service contracts and improper fund execution, for criminal investigation. For another 12 cases, including improper disclosure of information or failure to prepare accounting books, the city filed criminal complaints.
Additionally, the city issued corrective orders for 20 cases, including non-compliance with general assembly resolutions and improper dissolution assembly practices. Two project sites were fined for violations of fund trust requirements and failure to submit annual fund management plans. Regarding violations of cooperative regulations or procedures, 19 cases received administrative guidance.
The city plans to continue strict management and supervision to eradicate corruption within cooperatives. In particular, to minimize damage to cooperative members, the city will issue corrective orders requiring cooperatives to reconvene dissolution assemblies if they resolve to proceed with projects at general assemblies without discussing 'accounting reports at the time of dissolution' for sites where projects have been delayed for extended periods.
Choi Jinseok, Director of Housing at the Seoul Metropolitan Government, stated, "This investigation confirmed chronic violations such as the use of cooperative project funds for personal purposes and the excessive signing of service contracts," adding, "We will continue to strengthen management and supervision to enhance the effectiveness of fact-finding investigations and eradicate corruption within cooperatives."
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