"Did Hyundai Engineering & Construction Shift Golf Facility Costs onto Subcontractor?"...KFTC Conducts On-site Probe

On-site Inspection at Hyundai Engineering & Construction Headquarters for Three Days
Likely Probing Possible Violations in the Golf Practice Facility Installation Process

The Korea Fair Trade Commission (KFTC) has launched an investigation into allegations that a golf practice facility installed at the presidential residence in Hannam-dong, Yongsan-gu, Seoul, where former President Yoon Suk-yeol stayed, was installed illegally. This comes about two weeks after the Board of Audit and Inspection (BAI) notified the KFTC last month that it had found indications of unfair practices by Hyundai Engineering & Construction during the construction process.

According to related industry sources on the 12th, the KFTC sent investigators to Hyundai Engineering & Construction’s headquarters in Gye-dong, Jongno-gu, Seoul, and conducted an on-site inspection there for three days starting on the 9th. The KFTC is reportedly closely examining whether Hyundai Engineering & Construction violated the Act on the Fairness of Subcontracting Transactions (Subcontracting Act) in the course of installing an indoor golf practice range at the Hannam-dong residence at the request of the Presidential Security Service.

This investigation appears to have been decisively triggered by the BAI’s “Audit Results on the Relocation of the Presidential Residence,” which were released on January 29. At that time, the BAI pointed out that, while carrying out the golf practice facility construction, Hyundai Engineering & Construction demanded that a subcontractor shoulder construction costs on its behalf, causing the subcontractor to suffer a financial loss of about 190 million won.

Together with the notice of its audit findings, the BAI requested that the KFTC impose an administrative fine on Hyundai Engineering & Construction or take corrective measures and other appropriate actions under the Subcontracting Act. In particular, it is understood that the BAI viewed the matter as highly serious because, in construction work for a facility of national importance such as the presidential residence, a large private construction company allegedly used its superior position to shift costs onto a small subcontractor.

Through this investigation, the KFTC is expected to focus on whether Hyundai Engineering & Construction unfairly passed on additional costs incurred beyond the construction expenses it received from the Presidential Security Service to the subcontractor, and whether unreasonable terms were forced during the contracting process. A KFTC official responded, “We cannot comment on the specific details of individual cases.”

Meanwhile, the golf practice facility at the Hannam-dong residence had already sparked controversy in political circles over suspicions that it was an unauthorized illegal extension. With suspicions of violations of the Subcontracting Act by Hyundai Engineering & Construction, which oversaw the project, now added to the mix, the repercussions surrounding the relocation of the presidential residence are expected to grow even further.

This content was produced with the assistance of AI translation services.