Former Raemian One Pentas Cooperative President Agreed to 'Construction Cost Loss Compensation' with Samsung C&T

Cooperative Members Filed for Injunction in Opposition
Agreement Reached with Construction Company Amid Legal Dispute
Amended Construction Contract Signed Under Cooperative President's Name After Dissolution
If Compensation Is Paid to Samsung C&T, Refund per Member to Decrease by 55 Million Won

It has been revealed that Samsung C&T entered into an agreement with a cooperative that had already been dissolved in order to receive 9.4 billion won in compensation for construction cost losses related to Raemian One Pentas (formerly Sinbanpo 15th). Cooperative members had previously filed for an injunction opposing the compensation for construction losses, but before a ruling was reached, the former cooperative president hastily agreed with the construction company to provide compensation. If the injunction is dismissed and Samsung C&T is paid 9.4 billion won (excluding VAT), the refund amount each cooperative member would receive is expected to decrease by approximately 55 million won per person.

According to the Sinbanpo 15th Countermeasure Committee and others on January 19, Samsung C&T signed an agreement to amend the construction contract with the Sinbanpo 15th cooperative on December 16 of last year. The agreement stipulates that the payment the cooperative must make to Samsung C&T will be increased by about 9.4 billion won, from the original 288.7 billion won (excluding VAT) to 298.1 billion won.

The Sinbanpo 15th cooperative held a dissolution general meeting on December 5 of last year and switched to a liquidation committee system starting December 15. On December 16, the day after the former cooperative president became the liquidator, an amended construction contract was signed with the contractor under the title of "cooperative president."

Previously, in February last year, the cooperative passed an agenda at a general meeting to pay Samsung C&T 9.9 billion won for "construction cost compensation." In response, 39 cooperative members filed for an injunction to suspend the effect of the general meeting resolution. The injunction was dismissed in the first trial, and the members are currently appealing, with the second trial underway. The agreement was signed before the second trial verdict was delivered.

Considering the ongoing legal dispute with members opposing the construction cost compensation, the cooperative included special provisions in the agreement: "If the injunction filed by cooperative members is ultimately dismissed, the cooperative will pay Samsung C&T the increased amount stipulated in the agreement," and "If, regardless of the injunction, a main lawsuit is filed and the general meeting resolution loses effect, Samsung C&T will return the increased construction contract amount to the cooperative."

After contracting with Sinbanpo 15th, Samsung C&T requested compensation for losses even after increasing the construction cost three times. The initial contract in June 2020 was for 240 billion won with a construction period of 36.5 months. In January 2023, the contract was amended to 279 billion won and the construction period was extended to 42.5 months. At the time of the third amendment in April 2024, the amount was raised to 288.6 billion won. Subsequently, the countermeasure committee filed for an injunction, and an additional agreement was pursued to secure the 9.4 billion won in compensation for losses.

Since 2023, Samsung C&T has demanded compensation for losses totaling 28.6 billion won from the cooperative. The cooperative cited reasons such as the uninterrupted completion of construction, assistance in securing higher general sales prices, and providing emergency funds to resolve a provisional seizure as grounds for paying the compensation. The countermeasure committee, however, argued that there is no contractual obligation to pay the compensation, and also took issue with the fact that interest income was received when emergency funds were lent to resolve the provisional seizure.

A Sinbanpo 15th cooperative member stated, "It makes no sense for the liquidation committee to sign a contract under the cooperative's name after the dissolution general meeting. If the issue with Daewoo E&C's provisional seizure had been addressed by canceling and restarting the general sales approval, there would have been no problem. It is also problematic that the process of borrowing money from Samsung did not go through a general meeting resolution."

A representative of the countermeasure committee said, "It appears that the title of 'cooperative president' was used instead of 'liquidation committee representative' to avoid raising questions. We plan to file lawsuits to confirm the invalidity of the amended contract and the invalidity of the liquidation committee's resolution to sign the amended contract."

The One Pentas cooperative is embroiled in multiple lawsuits. Since changing the contractor from Daewoo E&C to Samsung C&T in 2020, they have been involved in a 20 billion won damages lawsuit filed by Daewoo E&C and a lawsuit to recover a 10 billion won bid deposit. In addition, the injunction regarding the payment of construction loss compensation has yet to be resolved. Samsung C&T has not issued any statement regarding these matters.