Gov’t identifies 28 more public sector employees in probe into LH scandal

March 19, 2021

 The government announced Friday it has identified 28 more public sector employees who bought land at “new town” development sites, including 23 suspected of engaging in speculative transactions.

Choi Chang-won, vice minister of government policy coordination at the Prime Minister’s Office, said 23 public servants and five public corporation employees were uncovered during the second stage of an inquiry into a massive land speculation scandal centered on the state housing developer, the Korea Land and Housing Corp. (LH).

“Of the 28, we suspect speculation by 23 and will refer them (to the police-led government investigative team) for investigation,” Choi, who heads an interagency government task force in charge of dealing with the LH scandal, said during a press conference.

The remaining five are believed to have inherited the land from family members and their cases will be transferred to the government investigative team as reference material, Choi said.

Choi Chang-won, vice minister of government policy coordination at the Prime Minister's Office, speaks at a press conference on the LH scandal at the government complex in Seoul on March 19, 2021. (Yonhap)
This image shows the headquarters of the Korea Land and Housing Corp. (LH) in Jinju, southeastern South Korea. (Yonhap)

Choi Chang-won, vice minister of government policy coordination at the Prime Minister’s Office, speaks at a press conference on the LH scandal at the government complex in Seoul on March 19, 2021. (Yonhap)

The inquiry covered eight zones — six that have been designated as part of the third new town project, including Gwangmyeong and Siheung, both south of Seoul in Gyeonggi Province, and two housing sites that are larger than 1 million square meters each.

In its second phase, it looked at property transactions of 8,780 public servants and employees at local governments and public corporations tied to those zones.

Nearly 130 of them refused to submit their personal information and their names will be sent to the government investigative team.

Choi said all 28 identified bought land in or around the third new town sites and that the 23 suspected of speculation include 10 employees of the Gwangmyeong municipal government and three of the Siheung municipal government.

The others included employees of the city governments of Ansan and Hanam and the respective urban development corporations of Bucheon, Gwacheon, Ansan and Gyeonggi Province. The listed cities are all located in Gyeonggi Province.

Much of the purchased land were farmland and bought in the last two years. Some of the identified people purchased multiple plots of land.

Separately, Choi said 237 people bought apartment units or other homes near the development sites.

“At the end of this month, we will come up with measures to root out real estate speculation and make sure this doesn’t happen again,” he said.

Around the same time, Cheong Wa Dae announced that it identified one possible case of land speculation by a mid-level official working for the Presidential Security Service.

The official, whose elder brother works for LH, jointly purchased land with his brother’s wife and other family members in one of the new town areas in 2017, Chung Man-ho, senior presidential secretary for public communication, said at a separate press briefing.

The LH scandal erupted in early March after two civic groups accused 14 LH officials of using insider information to buy farmland in Gwangmyeong and Siheung between April 2018 and June 2020, ahead of their formal designation as development sites last month.

The allegations have rocked the nation at a time when public discontent over soaring home prices runs high.

The Moon Jae-in administration is widely considered to be facing its biggest political crisis ahead of the April 7 mayoral by-elections in Seoul and Busan and with only a year left of its single five-year term.

Earlier Friday, investigators at the Gyeonggi Nambu Police Agency summoned an undisclosed number of LH officials for questioning on their suspicious land transactions.

In announcing the results of the first phase of its inquiry last week, the government identified 20 LH officials suspected of land speculation, including 13 that had been named by the two civic groups.

Prime Minister Chung Sye-kyun said that the government, the ruling Democratic Party and Cheong Wa Dae have agreed to consider a mandate requiring all civil servants, regardless of rank, to declare their assets.

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